Prince William's fiancee Kate Middleton said on Tuesday she was daunted but happy to be marrying into Britain's royal family next year after he proposed using his late mother Diana's engagement ring.
The couple faced the world's media after announcing they would tie the knot in 2011 following an eight-year courtship, with William saying he had felt it was the right time to propose.
The couple will marry in London next year in what will be Britain's biggest royal wedding since his parents Prince Charles and the then Lady Diana Spencer married at St Paul's Cathedral in July 1981.
Blinking in the glare of flashbulbs, Middleton told a press conference at St James's Palace that the second-in-line to the throne had popped the question during a holiday in Kenya three weeks ago, adding that he was a "true romantic".
"It's quite a daunting prospect but hopefully I'll take it in my stride. But William's a great teacher so hopefully he'll be able to help me along the way," said the 28-year-old.
William said the sapphire-and-diamond that his father, the heir to the throne, gave Diana in 1981 -- the pair showed it off themselves at a press conference nearly three decades ago -- was "very special to me".
Charles and Diana's union soured and Diana divorced him in 1996 amid accusations of mutual infidelity and claims that she had been frozen out by the royals. She died the following year in a car crash in Paris.
William said giving Kate the ring "was my way of making sure that my mother didn't miss out on today and the excitement and the fact that we're going to spend the rest of our lives together."
The official announcement, with details of the wedding to be announced at a later date, ended feverish speculation about when William would get engaged to Middleton, the daughter of a wealthy businessman.
Middleton and William met in 2001 at St Andrews University in Scotland where they were both studying art history. They broke up briefly in 2007 but soon got back together.
Prince Charles said he was "thrilled" at the engagement, joking: "They have been practising long enough."
Queen Elizabeth II and her husband Prince Philip were "absolutely delighted", Buckingham Palace said.
William described the moment he proposed in a television interview later on Tuesday.
"We had a little private time away together with some friends and I just decided that it was the right time, really. We had been talking about marriage for a while so it wasn't a massively big surprise," the prince said.
He said he had carried the ring around in his rucksack "for about three weeks" before proposing.
Asked about whether they planned to have children, William said: "We want a family so we'll have to start thinking about that."
A statement from Clarence House, Charles' residence and office, said that after marrying, the couple would live not in a palace but in north Wales where William is a Royal Air Force search-and-rescue helicopter pilot.
William's brother Prince Harry, who is training to become an army helicopter pilot, said in a statement he was "delighted that my brother has popped the question.
"It means I get a sister, which I have always wanted."
Kate's parents Michael and Carole said the family thought William was "wonderful" and "we are extremely fond of him."
Prime Minister David Cameron said the wedding would a "great moment for national celebration". He said his cabinet gave a "great cheer" when he told them the news.
The wedding is set to spread some joy in a Britain hit by economic gloom and austerity measures. It will happen a year before the queen celebrates her diamond jubilee marking 60 years on the throne and London hosts the Olympics.
Middleton's father was an airline steward and later became a flight dispatcher in charge of the British Airways fleet on the ground, while her mother was an air stewardess.
The couple made their fortune in the children's party business.
Messages of congratulation began to arrive from other parts of the Commonwealth, where William is second in line to become king.
"On behalf of all Canadians, I wish to congratulate His Royal Highness Prince William," Prime Minister Stephen Harper said in a statement.
"It would be an honour to welcome Prince William and his bride to Canada in the future."