The sovereign grant is examining various possibilities for Frogmore Cottage's future use, with the Windsor property standing empty since Prince Harry's departure, GB News understands.
Preliminary investigative work has been conducted at the site to assess whether splitting the residence back into two semi-detached properties remains feasible.
However, the People's Channel understands that no conversion project has been approved or begun, and a prospective occupant has yet to be found.
The cottage has sat vacant since King Charles asked the Duke of Sussex to vacate in 2023, shortly after his memoir Spare was released.
A general view of Frogmore Cottage on the Home Park Estate
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Specialists are thought to be assessing the viability of restoring the building to its original two-dwelling configuration.
Queen Elizabeth II gifted the property to Harry and Meghan in 2018, when it comprised two separate residences that were subsequently combined into a single family home.
The transformation took approximately a year to complete, involving extensive structural work, including new ceiling beams, floor joists, complete electrical rewiring, and new gas and water systems.
A yoga studio was also installed during the renovation, which cost £2.4million in total.
Meghan Markle and Prince Harry no longer have a permanent base in the UK
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Sources have indicated that reversing these changes to restore the cottage to its pre-Sussex state would require significant, expensive construction work.
The Sun reported that plans are being developed to undo the extensive refurbishment.
The duke and duchess personally covered their interior design expenses, which included a £5,000 copper bathtub and work by Soho House designer Vicky Charles, with vegan paint used throughout.
A source told the Sun: "It's been empty for three years. Even Andrew thought it wasn't good enough for him to move in."
Andrew Mountbatten-Windsor reportedly rejected proposals to relocate to Frogmore Cottage amid discussions about his future at Royal Lodge
| PAAndrew Mountbatten-Windsor reportedly rejected proposals to relocate to Frogmore Cottage amid discussions about his future at Royal Lodge.
The source added: "Maybe if they get rid of any trace of Harry and Meghan, then someone within the royal household will fancy it."
The property falls outside Crown Estate management due to the Frogmore House Act 1841, which annexed the mansion, gardens and grounds to Windsor Castle for the Sovereign's use.
This designation places Frogmore Cottage within the taxpayer-funded Occupied Royal Palaces estate, with maintenance costs covered by the Sovereign Grant rather than commercial Crown Estate operations.
Prince Harry settled the £2.4million renovation bill six months after stepping away from royal duties.
The Sussexes currently lack any residence in Britain, having moved to California where they live with Prince Archie, seven, and Princess Lilibet, four.
Their final stay at Frogmore came during the late Queen's funeral in 2022.