William and Kate learnt of the news while they were on the penultimate day of their three-week royal visit to Australia and neighbouring New Zealand and released a statement via a spokesperson.
"The Duke and Duchess of Cambridge were saddened to learn this morning of the tragic death of Mark Shand," it read. "Their thoughts are with the Duchess of Cornwall and her family at this time."
Prince William and Kate on tour in Australia
Camilla was said to have been "utterly devastated" by the sudden loss of her younger brother. She and Prince Charles were understood to have been in Scotland when they were told the news.
Mark passed away after falling outside of a club in New York. He was taken to hospital on Tuesday evening after he slipped as he smoked a cigarette at an after-party which followed a charity fundraising party in the city.
In a statement, Clarence House said: "It is with deep sadness that we have to confirm that the Duchess of Cornwall's brother, Mark Shand, has today passed away in New York."
Camilla and her younger brother Mark
It went on: "Mr Shand died in hospital as a result of a serious head injury which he sustained during a fall last night. The Duchess, the Prince of Wales and all her family members are utterly devastated by this sudden and tragic loss."
In the statement Mark was described as a man of "extraordinary vitality, a tireless campaigner and conservationist."
The 62-year-old was the chairman of a wildlife foundation called Elephant Family, which in a statement said: "Today we've lost the head of our family. Mark Shand was a true force for conservation a legend and inspiration."
Mark passed away at the age of 62
At the fundraising event Mark was overseeing an auction with Sotheby's which was raising money for the Elephant Family, and for Studio In A School, which raises money for children in New York City.
Mark had gone on to the after-party which was being held at the Diamond Horseshoe, a luxury nightclub near Times Square.
He is survived by his 19-year-old daughter Ayesha and his French actress wife Clio Goldsmith.