The Girls Aloud singer was "thrilled" when her boyfriend, DJ Tom Crane, surprised her by getting down on one knee during New Year`s Eve (31.12.10) celebrations during a romantic break in the Maldives.
A source told The Sun newspaper: "Sarah is absolutely thrilled. She didn`t see it coming at all. When he went down on one knee it came as a huge surprise.
"Their relationship has gone from strength to strength since they moved in together. They are inseparable. Tom has shelled out on a big sparkler to let everyone know she`s now taken."
Sarah, 29, and Tom - who have been dating since 2007 - had discussed marriage in the past, but the blonde beauty was reportedly reluctant to rush into walking down the aisle after witnessing the heartbreak of her bandmate Cheryl Cole, who got divorced from soccer star Ashley Cole last year after four years of marriage.
An insider explained to the Daily Mirror newspaper: "After the fall-out from Cheryl`s wedding and divorce, it gave the other girls something to think about - especially about rushing into anything.
"Sarah`s always been very cautious and wanted to make sure it was the right time to say yes."
Tom has been open about marrying Sarah in the past and once revealed that he would like a traditional wedding rather than a glitzy "celebrity" one.
He said: "I know what kind of ring Sarah wants, we`ve looked on holiday.
"I`m very romantic. I want an old-fashioned English wedding. I want to the top and tails, more subtle than a celebrity wedding."