The country star, who went through a painful split in 2008, is engaged to Swiss executive Frédéric Thiébaud.
"They've been engaged a couple months," a source confirms to PEOPLE. Twain's manager also confirms the happy news.
In asking for her hand in marriage, Thiébaud, 40, presented Twain, 45, with a three-carat solitaire diamond ring.
The two grew close after Twain's husband of 14 years, music producer Robert "Mutt" Lange abruptly left her for another woman in May 2008. The alleged affair was between Lange and Thiébaud's then-wife, Marie-Anne, a longtime secretary and manager of the couple's chateau in Switzerland.
"Mutt and Marie-Anne left their spouses for each other and are still in a relationship," a source told PEOPLE at the time. (Lange denied an affair).
Twain and Frédéric Thiébaud were later spotted vacationing together in Canada, New York and Florida.
In August 2009, Twain finally addressed the relationship in an emotional tribute, referring to her fiancé as "a dear friend and true gentleman" and writing that he had "been the most constant companion and support for both [her son] Eja and I. And having gone through the suffering of his family splitting apart at the same time and under the same extreme circumstances, he understands me better than anyone."
Friends of the couple say they've managed to find happiness together after what was a painful situation for both of them.
"Her happiness certainly shone through," Twain's pal Stéphane Lagonico, an ambassador for the Swiss Red Cross, told PEOPLE recently of the pair, who attended a Red Cross ball together. "They are a great addition to each other's lives."
Added another friend: "Shania and Fred are a couple that fit together."
Twain has a documentary series called Why Not? on OWN and a memoir due this spring.