The news follows the announcement that former Palace communications secretary Simon Walker is to join Reuters, replacing outgoing PR chief Peter Thomas.
Russell-Smith, who joined the Palace press office as assistant press secretary in 1993, said she would take over the newly-merged role of comms and press secretary.
She said the Palace felt it was unnecessary to maintain both posts following the end of the Golden Jubilee year.
Russell-Smith heads a team of 11, overseeing all PR for the Royal family, except the Prince of Wales and Princes William and Harry.
She will be supported by assistant press secretary and former National Grid head of external comms Samantha Cohen, who has been promoted to deputy press secretary.
Walker's two-year secondment from British Airways ended in September, but he remained at the Palace during the recruitment period.
At Reuters he will take over a remit to lead international comms, including a team of 24 spanning offices worldwide, and a PR agency roster.
Thomas retires next February after 32 years with Reuters, allowing time for a one-month handover of what is said to be one of the most demanding jobs in PR.
Walker joins after a downbeat year for the group, which has seen redundancies and a falling share price.
But Walker this week said on taking the post: 'Since I was a journalist 25 years ago, I've had huge respect for Reuters. I'm joining at an exciting time and looking forward to it.'
He will report directly into Reuters' executive board, covering investor relations, PR, internal comms and all activities surrounding the company's brand strategy.