It comes after the Queen stripped Andrew of his honorary military roles and he gave up his use of HRH style in a dramatic fallout from the lawsuit.
Judge Lewis A Kaplan on Wednesday dismissed a motion by the duke’s lawyers to have the lawsuit thrown out after they argued Ms Giuffre had waived her right to pursue the royal by signing a confidential settlement with disgraced financier Jeffrey Epstein
Ms Giuffre is suing the duke in the US for allegedly sexually assaulting her when she was a teenager.
She wrote on Twitter she was “pleased” with the ruling, adicionando: “I’m glad I will have the chance to continue to expose the truth & I am deeply grateful to my extraordinary legal team.
“Their determination helps me seek justice from those who hurt me and so many others. My goal has always been to show that the rich and powerful are not above the law & must be held accountable.
“I do not walk this path alone, but alongside countless other survivors of sexual abuse & trafficking.”
It comes after the Queen stripped Andrew of his honorary military roles and he gave up his use of HRH style in a dramatic fallout from the civil sex case.
Andrew, who was born an HRH, will not use it in any official capacity, a royal source said and the duke has also been stripped of his remaining royal patronages.
The decision represents the duke’s complete removal from official royal life, and an attempt to distance the monarchy from Andrew, who was once second in line to the throne as the spare to the heir, in the year of the Queen’s Platinum Jubilee.
It paves the way for Andrew to seek an out-of-court settlement with Ms Giuffre without the fear of his decision – likely to be viewed unfavourably by the public – being associated with the royal family.
Ms Giuffre claims she was trafficked by Andrew’s friend Jeffrey Epstein to have sex with the duke when she was 17 and a minor under US law.
The duke has strenuously denied the allegations.
A royal source said the issue had been widely discussed within the royal family, making it likely that the Prince of Wales and Duke of Cambridge were involved in crisis talks over the matter.
Buckingham Palace said in a statement on Thursday: “With the Queen’s approval and agreement, the Duke of York’s military affiliations and royal patronages have been returned to the Queen.
“The Duke of York will continue not to undertake any public duties and is defending this case as a private citizen.”
It is understood the decision was taken by mutual agreement between the Queen and her son but the ultimate decision would have fallen to the monarch and been a difficult one.
As a former Royal Navy officer who served in the Falklands War the loss of his association with the military units and regiments, the most prestigious being Colonel of the Grenadier Guards, will be keenly felt by Andrew.
The source said the military posts would be redistributed to other members of the royal family.
But Andrew will keep his rank of Vice Admiral and his role of Counsellor of State, undertaken by the spouse of a monarch and the next four adults in the line of succession.
It is not clear what effect the decision will have on the level of security provided for the duke now his status has been reduced.
The Queen is head of the armed forces and honorary military appointments are in her gift.
The Palace said previously that the duke’s military appointments were in abeyance after he stepped down from public duties in 2019 after his disastrous Newsnight interview.
But until now he still retained the roles, which left the eight British regiments in limbo more than two years on.
A source close to the duke said he would “continue to defend himself” against Ms Giuffre’s allegations following the judge’s decision to dismiss his legal team’s attempt to have the case thrown out.
The source said: “Given the robustness with which Judge Kaplan greeted our arguments, we are unsurprised by the ruling.
"Contudo, it was not a judgment on the merits of Ms Giuffre’s allegations.
“This is a marathon not a sprint and the duke will continue to defend himself against these claims.”
Andrew’s other British honorary military roles were: Honorary air commodore of RAF Lossiemouth; Colonel-in-chief of the Royal Irish Regiment; Colonel-in-chief of the Small Arms School Corps; Commodore-in-Chief of the Fleet Air Arm; Royal colonel of the Royal Highland Fusiliers, 2nd Battalion, The Royal Regiment of Scotland; Deputy colonel-in-chief of The Royal Lancers (Queen Elizabeth’s Own); and Colonel-in-chief of the Yorkshire Regiment.