The Royal Family are said to be delighted.
The significance of this child is that one day, it will grow up to be our King or Queen, regardless of gender due to the change in the law for succession in 2011.
The new baby will push HRH Prince Henry of Wales (Prince Harry) down to fourth in the line of succession and push everyone below him down even further.
Catherine is said to currently be in hospital suffering with nausea (morning sickness), this was the only reason the Duke and Duchess decided to announce this now, rather than waiting a little longer.
To find out more about what will happen from hereon in with regards to the pregnancy stages and then birth, see our article at http://royalcentral.co.uk/?p=269
The full statement from Buckingham Palace said:
Their Royal Highnesses The Duke and Duchess of Cambridge are very pleased to announce that The Duchess of Cambridge is expecting a baby.
The Queen, The Duke of Edinburgh, The Prince of Wales, The Duchess of Cornwall and Prince Harry and members of both families are delighted with the news.
The Duchess was admitted this afternoon to King Edward VII Hospital in Central London with Hyperemesis Gravidarum. As the pregnancy is in its very early stages, Her Royal Highness is expected to stay in hospital for several days and will require a period of rest thereafter.
We will bring more on this story, here as it emerges this afternoon.