The fourth in line to the throne will be known as Her Royal Highness Princess Charlotte of Cambridge.
There had been speculation that the couple would include the name of Diana in honour of Prince William's mother, BBC reported.
The name is being seen as a triple homage to her grandfather Prince Charles, great-grandmother Queen Elizabeth II and Diana.
Charlotte was born on Saturday in the Lindo Wing of London's St Mary's Hospital.
The baby weighed in at 8 pounds, 3 ounces.
Charlotte is the second child of the couple. Prince George was born on July 22, 2013.