The glamorous blonde is the half-sister of Princess Anne's children, Zara and Peter Phillips, on their dad's side.
Captain Mark Phillips, the Princess Royal's first husband, went on to welcome Stephanie with his second wife, Sandy Pflueger.
His youngest daughter is 23 years old and will tie the knot with her boyfriend of two years, William Hosier.
The couple announced the news on Instagram with a series of sweet photos.
WATCH: Zara Phillips' husband Mike Tindall reveals new feature at couple's home
In the first, the couple hugged and Stephanie placed her hand on her fiance's chest, showing off her beautiful sapphire engagement ring.
In the second picture, which was black-and-white Stephanie held onto William's face as the two gazed at each other adoringly.
Stephanie shared the exciting news with her followers on Instagram
In the third, they smiled and again looked enamoured with each other – how lovely!
She did not caption the photos except to add a ring emoji in the middle of two blue hearts.
Royal watchers were excited to see the post and rushed to share their well wishes for the couple in the comment section.
"Exciting news! Many congratulations to you and William," wrote one.
Another added: "Congratulations, you both look great together."
Zara and Peter will no doubt be thrilled for their half-sister Stephanie
A fourth teased, referring to Stephanie's siblings' daughters: "Congratulations. I'm excited that maybe we'll see Savannah, Isla, Mia and Lena as bridesmaids, right?"
She is now auntie to five children on her dad's side, as Zara gave birth to son Lucas last month.
A couple of weeks ago, Zara's husband, Mike Tindall, revealed that he had the "best day" caring for their little boy.
Speaking on his podcast, The Good, the Bad and the Rugby, the doting dad told his co-hosts Alex Payne and James Haskell: "Literally you feed him, he goes to sleep, I went to the gym, he wakes up, I feed him. I watched rugby whilst I was feeding him, he went back to sleep. It was the best day."
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