The Queen will spend Christmas Day with the Prince of Wales and the Duchess of Cornwall, a Clarence House spokesman says.
The head of state will stay at Windsor for her first Christmas without her late husband, the Duke of Edinburgh, rather than travel to Sandringham in Norfolk.
It is the second year running that the royal family's long-running tradition of hosting the festive holiday in Sandringham - as they have done each year since 1988 - has been cancelled.
The Queen will nevertheless be joined by members of her family over the festive period, including a visit from Charles and Camilla on Christmas Day.
The Earl and Countess of Wessex, who live close by, are also expected to visit, along with their children, Lady Louise and James, Viscount Severn.
The Duke of York is also expected to join the festivities at Windsor Castle, while the attendance of his former wife, the Duchess of York, has not been ruled out. The couple remain close and still live together at Royal Lodge on the Windsor estate.
The Duchess would not have joined the family for the traditional gathering at Sandringham and had been expecting to spend Christmas Day on her own, as she has done for the past 20 years.
But with the larger family celebration off the cards, it is thought possible she could be invited to join the Queen alongside the Duke and potentially their daughters, Princesses Beatrice and Eugenie, whose babies will be enjoying their first Christmas.
The Duchess was twice invited to stay at the main house on the Balmoral estate this summer for the first time in many years, prompting speculation that she was being welcomed back into the royal fold.
Princess Anne will nevertheless not be able to spend Christmas with the monarch after her husband, Vice Admiral Sir Timothy Laurence, tested positive for coronavirus.
Palace sources said the couple are now self-isolating and will not travel to Windsor Castle.
The Duke and Duchess of Cambridge will be also not be in attendance and will be spending Christmas in Norfolk, a spokeswoman confirmed.
They will be joined by some members of the Middleton family.
Those visiting the Queen are unlikely to appear in public in anything equivalent to the annual Sandringham walk to church, where royal wellwishers gather to see the Queen and her family.
The Queen took the decision this year to remain at Windsor as a "precautionary" measure after rising Covid-19 cases because of the Omicron variant.
The Queen and Prince Philip also spent the Christmas period last year at Windsor.
The news follows the Queen's cancellation of her traditional pre-Christmas lunch with her extended family, which had been scheduled for Tuesday.
A Buckingham Palace source said: "The decision was a personal one after careful consideration and reflects a precautionary approach."