The King has been presented with the first banknotes bearing his portrait by the governor of the Bank of England.

The monarch received a leather-bound booklet containing the historic legal tender from Andrew Bailey  at Buckingham Palace on Tuesday (British time).

It was a milestone moment for the King, who being treated for an undisclosed cancer, to see his image on the new polymer notes just over 18 months since the start of his reign.

He inspected the four banknotes – in denominations of £5, £10, £20 and £50 – the first low-numbered note of each denomination with 01 000001 serial numbers – and pointed and smiled at the details as Bailey turned the pages, showing the front and back.

They were joined by Sarah John, the Bank of England’s chief cashier, whose signature appears on the currency, and the King gave a broad grin as he greeted his guests in the 1844 Room.

He is only the second monarch to grace the Bank of England’s notes – and it is the first time one sovereign’s image has been replaced with another.

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Although notes began to be issued from the late 17th century, the King’s mother, the late Queen Elizabeth II, was the first sovereign to be given the honour in 1960 on a paper £1 note.

Before this, Britannia was the only character to have appeared.

The money will be issued gradually into circulation from June 5 – with the King’s portrait featuring on the front of the banknotes, as well as in cameo in the see-through security window, visible on the front and back.

The reverse side characters remain unchanged from previous editions. Sir Winston Churchill is on the £5, Jane Austen on the £10, JMW Turner on the £20 and Alan Turing is on the £50.

Existing notes featuring the portrait of the late queen will continue to be legal tender, so the Elizabeth II and King Charles III notes will co-circulate.