Prince Charles and Camilla Parker Bowles have hosted a dinner at Windsor Castle, their first public appearance since announcing their engagement.
Mrs Parker Bowles was wearing a large diamond engagement ring
Mrs Parker Bowles said the prince went down on one knee to propose and added: "I'm just coming down to earth."
She will take the title HRH Duchess of Cornwall after the civil ceremony at Windsor Castle on 8 April.
When the Prince of Wales, 56, becomes king, Camilla, 57, will be known as the Princess Consort and not Queen Camilla.
Princes William and Harry said they are "very happy" and wish the couple "all the luck in the future".
Charles said he and his wife-to-be were "absolutely delighted".
As the couple arrived for Thursday evening's business gala dinner they were applauded by waiting guests, before posing for photographs.
Among those attending were Sir Jonathon Porritt, co-director of the Prince of Wales's Business and Environment Programme and Sir Stuart Hampson, chairman of the John Lewis Partnership.
The marriage will end years of speculation on a relationship which has spanned the decades since the couple first met in 1970.
The wedding will be a civil ceremony, which will be followed by a service of prayer and dedication in St George's Chapel at which the Archbishop of Canterbury, Dr Rowan Williams, will preside.
"The Duke of Edinburgh and I are very happy that the Prince of Wales and Mrs Parker Bowles are to marry," said the Queen, in a statement.
Charles was married to Diana, Princess of Wales, who died in a car crash in Paris in 1997.
The princess famously referred to Mrs Parker Bowles as one of the contributing factors in the breakdown of her marriage to Charles.
The couple, who had two sons - princes William and Harry - had divorced when Diana died.
The platinum and diamond ring is a Royal Family heirloom
A spokeswoman for Princess Diana's brother, Earl Spencer, said he would not be making any comment on the wedding announcement.
Tony Blair said he was "delighted" for the couple and offered his congratulations, as did Conservative leader Michael Howard and Liberal Democrat leader Charles Kennedy.
The marriage is likely to be a sensitive issue because Mrs Parker Bowles is divorced and her former husband is still alive.
If he became king, Charles would be the supreme governor of the Church of England and some Anglicans remain opposed to the remarriage of divorcees.
The Archbishop of Canterbury said: "I am pleased that Prince Charles and Mrs Camilla Parker Bowles have decided to take this important step."
He added that he hoped the marriage would be "a source of comfort and strength" to the couple and those close to them.
BBC Royal correspondent Nicholas Witchell said: "This is a step not without considerable risk by the Royal Family.
"They will be watching very carefully to see how public opinion unfolds."
Last year, a poll indicated that more Britons supported Prince Charles marrying Camilla Parker Bowles than opposed it.
Of those who responded to a Populus poll, 32% said they would support Charles if he remarried, while 29% were opposed.
However, most people - 38% - said they did not care, while 2% had no opinion.
Mrs Parker Bowles has joined the prince at numerous engagements in recent years - mostly at evening events for The Prince's Trust.
Clarence House staff were at pains to point out that she attended these events in a private capacity.