The `Hunger Games` actor proposed to his girlfriend of three years on May 31 with a 3.5-carat diamond ring from jeweller Neil Lane.
Miley, 19, told People magazine: "I`m so happy to be engaged and look forward to a life of happiness with Liam."
The `LOL` actress also tweeted today: "life is beautiful."
The couple met while working together on `The Last Song` in 2009 and Liam, 22, has previously admitted while he wanted to be professional on the film, they couldn`t help but fall in love after working so closely together.
He said: "What happened happened, and we`ve been together since.
"She makes me really happy. When you start, you want to be professional, but when you`re filming those scenes with someone and pretending to love them, you`re not human if you don`t feel something."
In turn Miley has said that Liam is the perfect guy because he listens to her.
The singer-and-actress - who split from Liam in 2010 before rekindling their relationship last year - knows he is the right man for her because he`s always there to lend a sympathetic ear instead of telling her what to do.
She said: "I think it`s someone that is always there to listen and I think that`s when people make mistakes because they always want to have the answers and I don`t like people trying to fix me, I just like them being able to listen."
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