The Duchess of Cambridge has been admitted to St Mary's Hospital in London in the early stages of labour, Kensington Palace says.
She travelled by car from Kensington Palace to the Lindo Wing of the hospital with the Duke of Cambridge.
Kate is being tended by a top medical team led by the Queen's former gynaecologist Marcus Setchell, who delivered the Countess of Wessex's two children.
Assisting him is Alan Farthing, the former fiance of murdered TV presenter Jill Dando and the Queen's current gynaecologist.
The world's press have been camped outside St Mary's in Paddington for days in anticipation of the birth.
The hospital's Lindo wing is a private obstetric unit, with prices starting at just under 5000 pounds for a normal delivery package over 24 hours, with consultants' fees around 6000 pounds extra depending on the care required.
Prices increase if the delivery is a difficult one or the mother has a caesarean section.
But Kate is intending to have a natural birth and does not know whether she is going to have a boy or girl.
The news that what had been dubbed by bored journalists 'the Great Kate Wait' was finally over was announced in a brief statement from Kensington Palace at 7.30am after rumours she had been spotted began circulating.
The statement read: "Her Royal Highness The Duchess of Cambridge has been admitted this morning to St Mary's Hospital, Paddington, London, in the early stages of labour.
"The Duchess travelled by car from Kensington Palace to the Lindo Wing at St Mary's Hospital with The Duke of Cambridge."
The Duke and his younger brother Prince Harry were born in the Lindo wing and the Prince and Princess of Wales famously posed on the building's steps in 1982 holding baby William in turn.
Betting on the name of the royal baby, which will be third-in-line to the throne, has produced one favourite with a number of bookies - Alexandra.
Many punters believe William and Kate will have a girl and have put their money on the name.
Other monikers that have attracted royal fans include Charlotte, Diana, Elizabeth and Victoria, with George and James picked by those who think the new baby will be a boy.
William will take paternity leave from his job as an RAF search and rescue helicopter pilot.
But it is not known how long the Duchess will take off from her royal duties to care for her first child.
The new royal baby will be the Queen's third great-grandchild and is destined to be crowned monarch.
It will be the 43rd sovereign since William the Conqueror if, as expected, it follows reigns by Charles then William.
The Duke is known to want a daughter while the Duchess is hoping for a son.
Recent changes to the rules of succession mean if a girl is born she will not be leapfrogged by a younger brother at a later date.
The sex of an infant in direct line to the throne no longer determines whether he or she wears the crown.
Confirmation that the Duchess is in hospital also means the nation is aware that Kate is in labour.
This is something that would have been unthinkable when the last granddaughter-in-law of a reigning queen to give birth to a future monarch did so in the 1890s.
George V's wife Mary of Teck, who was then the Duchess of York, had the future Edward VIII in 1894 and the future George VI in 1895, but news of her 'confinement' was limited.
SBS Europe correspondent Brett Mason is in London following the details.
