Grand Duke Henri of Luxembourg has surprised the world with his shock announcement that he is stepping back from royal duties.

The European monarch has decided to hand over the throne to his eldest son after 24 years on the throne. 

The 69-year-old announced his 'abdication' on National Day, an annual event that brings together the members of the Grand Ducal family, members of government and members of parliament to celebrate the Grand Duke's official birthday.

In his bombshell statement, Henri revealed that his eldest son, Prince Guillaume, 42, will assume his position on the throne in the autumn.

He said: "I would like to inform you that I have decided to appoint Prince Guillaume as Lieutenant-Representative in October."

The monarch concluded his holiday address by saying: "It is with all my love and confidence that I wish him the best of luck."

The Grand Duke will retain his official title but will instead be represented by his son Hereditary Grand Duke Guillaume. A full change in the Grand Duchy will likely take several years.

Luxembourg's Prime Minister Luc Frieden responded to the news and said: "This is the beginning of a next chapter for our monarchy."

Reacting to the decision, the PM said the decision had been discussed for some time, as the Grand Duke was keen to retire, saying: "We have been talking about it for some time, and I think that on the national holiday it was the right moment, because the Grand Duke is the symbol of our nation."

Grand Duke Henri is the eldest son of Grand Duke Jean and Grand Duchess Joséphine-Charlotte. He officially became Head of State of the Grand Duchy of Luxembourg on October 7, 2000 following his father's death in 1999.