The Duchess of Cambridge brought Prince George’s little sister into the world at 8.34am at St Mary's Hospital
Kate Middleton and Prince William have presented their newborn daughter to the world on the famous steps of the Lindo Wing.
The Duke and Duchess of Cambridge beamed as they cradled the tot, in scenes that echoed those back in July 2013 when Kate gave birth to Prince George.
The pair posed for news photographers and the crowd, who showered the beaming family with cheers and well wishes.
Less than 12 hours after giving birth, the Duchess of Cambridge looked stunning in a yellow and cream floral dress by the British designer Jenny Packham.
Afterwards William carried his daughter to the car in a baby seat, before driving the blacked out Range Rover home.
Earlier William had left to pick up his son from nearby Kensington Palace.
He told the world's waiting press he was "very happy".
When he came back a short time later Little George delighted the watching world with an adorable wave to the crowd, before his dad gave him a gentle peck on the cheek, before they went inside to introduce him to his little sister.
Princess: The beautiful baby girl
The princess will spend her first night at home. William, Kate and the baby will leave the Lindo Wing later this evening for Kensington Palace, a spokesman said.
Prince George has already been taken home.
The Duchess brought the little princess into the world at the Lindo Wing with Prince William by her side at 8.34am.
An announcement issued by Kensington Palace via email and Twitter said: "Her royal Highness The Duchess of Cambridge was safely delivered of a daughter at 8.34am.
"The baby weights 8lb 3oz. The Duke of Cambridge was present for the birth.
Grin: The new parents were all smiles as they presented the princess to the world
"The Queen, The Duke of Edinburgh, The Prince of Wales & The Duchess of Cornwall, Prince Harry & members of both families have been informed
"Her Royal Highness and her child are both doing well."
William and Kate have thanked all staff at the hospital for the care and treatment they have have received.
Kensington Palace made the announcement on its Twitter feed.
They also want to 'thank everyone for their warm wishes'.
The baby is fourth in line to the throne, knocking uncle Prince Harry down to fifth place, and because of new laws she will keep her place in the line of succession even if she has a younger brother.
Just like Harry, she will also grow up with the “spare” to the heir tag and be pushed down the line of succession when George grows up and has children.
Millions of people across the world are now waiting to see the princess as doctors, led by royal obstetrician Guy Thorpe-Beeston, run routine checks on mother and daughter.
Prime Minister David Cameron tweeted: "Congratulations to the Duke and Duchess of Cambridge on the birth of their baby
girl. I'm absolutely delighted for them," while Labour leader Ed Miliband said the news was fantastic and added "I know the whole country will be wishing them well."
The birth has also provided a boon to the country's bookmakers who having first offered odds on the child's likely
sex, now turn their attention to names, with Charlotte, Alice, Victoria and Elizabeth the current favourites.
Slightly longer odds are available on Diana, Eleanor and Alexandra.
The news of the new royal princess's birth made headlines around the world.
News outlets from the US to Australia ran the news about the latest British royal, with most favouring a simple headline of "It's a girl". They included the French paper Le Monde, which used the phrase in English.
The story had top billing on the front page of the New York Post website, with the first line reading: "A princess is born."
USA Today also gave it top billing, with a later headline: "Prince George meets his new baby sister!"
Amazing tributes to celebrate the arrival of the Princess have already been made, including a dazzling announcement in lights at the tip of London's iconic BT Tower, and there are more to come.
On the high seas the crew of HMS Lancaster, known as the 'Queen's Frigate', today sent a message of congratulations to the Royal couple and Prince George.
Sailors on board the Type 23 Frigate spelled out the word "SISTER" on the deck which was then photographed by the ship's helicopter.
Meanwhile, Tower Bridge will be lit up with pink lights later tonight.
A Princess Diana charity has announced that her legacy will live on through the new royal princess.
The Diana Award, set up to continue the work of the Queen of Hearts, today tweeted its delight about the late princess' granddaughter.
Testy Ojo, the CEO of the charity, the only one bearing the Princess' name, said: "Today Diana would have been a proud grandmother for a second time."
"It is heartening to know that her legacy will live on through her first granddaughter."
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