The Duke of York had planned to walk alongside other senior members of the royal family dressed in velvet robes and plume hats at the ceremony on Monday afternoon.
However, following an eleventh-hour intervention from Prince Charles and Prince William, the decision was taken to ban him, according to several media reports.
He had planned to attend the entire ceremony, including the service at St George’s Chapel, the grand procession and the traditional members’ lunch.
Now, he will attend only the private elements of the occasion, Buckingham Palace confirmed.
“The Duke of York will attend the investiture and lunch today but will not be part of the procession or service,” said a palace spokesman.
Camilla, the wife of Prince Charles, will be installed as a Royal Lady of the Order of the Garter during the service.
Queen Elizabeth II will not attend the event, a decision which came as no surprise given her mobility issues.
Prince Andrew, who has been a Garter Knight since 2006, remains ninth-in-line to the throne despite being forced to step down from royal duties in 2019.
Queen Elizabeth II decided to strip her son of his role after public backlash following a TV interview in which he failed to express remorse for victims of his former friend, paedophile Jeffrey Epstein.
Prince Andrew also used the interview to repeat his denial of sexual allegations made against him by Virginia Giuffre, who was trafficked by Epstein.
In March, the prince reached an out-of-court settlement in the case, reported to be as much as £12 million. In anticipation of the legal battle, the British monarch stripped Prince Andrew of his honorary military roles in January, including Colonel of the Grenadier Guards, and he gave up his HRH style.
Earlier this month, Prince Andrew was expected to attend public celebrations for the queen’s platinum jubilee but pulled out after testing positive for Covid-19.
Former prime minister Tony Blair will attend Monday's service to be appointed a Knight Companion of the Most Noble Order of the Garter — the highest possible ranking in the oldest and most senior British Order Chivalry.
After the move was announced in December, a petition was started to have the knighthood “rescinded”, and more than 1.5 million people went on to sign it.
The former Labour leader was prime minister during the Allied military invasions of Iraq and Afghanistan.
Critics were expected on Monday to stage a protest outside Windsor Castle.