Davy, 24, allegedly made the break ahead of a move to South Africa, where she will begin a legal career.
According to the News Of The World, she told friends: "We're finished. This is a new beginning for me. I want to start my career in South Africa where I plan to spend the rest of my life. I don't want to live in Britain."
A source said: "It was a gradual end to the relationship. It whimpered out.
"It's not practical with Harry's commitments to the army and his family to be in a relationship with someone in a different country. It was an obvious time for a clean break. The spark is gone and she's focused on moving back to be where her heart lies.
"She was distraught when they split last year but it's different now. She knows she did everything to make it work. They are still friends and will always have a special place for each other."