"Michael surprised Tara with a beautiful round brilliant cut ring," the actress's rep tells PEOPLE exclusively. "Tara was so happy, and the other patrons clapped and yelled out, 'Congratulations.'"
Reid, 34, and Axtmann, an Internet entrepreneur, began dating last year. They are planning a small wedding for family and friends by this summer.
Reid, who posed for Playboy's January/February issue, recently completed production on the comedy Last Call and the psychological thriller The Fields.