Us Weekly reported yesterday that William, 30, has paid the deposit as a gift to Carole and Michael Middleton, the parents of Kate and her siblings Pippa and James.
The British newspaper the Daily Mail had reported that the couple -- who run the estimated $47 million-a-year party-supply company Party Pieces -- won a bidding war for the seven-bedroom Georgian manor on 19 acres of land in Berkshire County, outside London.
The Middletons contributed toward the cost of last year's Royal Wedding, according to the paper, and reportedly paid $150,000 for their daughter's wedding dress, designed by Sarah Burton for Alexander McQueen; Pippa's maid of honor gown; hotel rooms; and the newlyweds' honeymoon in Seychelles.
The estate is near the Middletons' current residence in the Berkshire village of Bucklebury, reported Us.
Situated on a secluded country lane amid gardens of informal lawns and topiary shrubs, the house boasts an en-suite master bedroom, a drawing room, a dining room with a 17th-century fireplace, a library, a sitting room and an entrance hall, according to the Daily Mail.
Some rooms are lined with hand-painted silk wallpaper.
The grounds also house a tennis court and a swimming pool.
A Palace rep told Us the royal family would have no comment, calling it a "private matter."
The land traces its pedigree to King Henry I, who granted it to the monks of Reading Abbey, according to the Daily Mail. In 1540, King Henry VIII granted the estate to the Winchcombe family. It later passed to their descendants, the Hartleys, the last of which moved out in 1957 -- though they retain the title Lord and Lady of the Manor, which does not transfer to the new owners.