Queen Margrethe II of Denmark visits the Academy of Fine Arts on November 13, 2021 in Munich, Germany (Photo: AFP/ VNA)

The 83-year-old queen, who ascended the throne in 1972, made the surprise announcement on live TV during her traditional New Year's Eve speech.

Referring to a successful back operation she underwent in February, she said, "The surgery naturally gave rise to thinking about the future - whether the time had come to leave the responsibility to the next generation".

In Denmark, formal power resides with the elected parliament and its government. The monarch is expected to stay above partisan politics, representing the nation with traditional duties ranging from state visits to national day celebrations.