Former Beverly Hills, 90210 star Green initially proposed to Fox in 2006 after two years of dating, but they split in February, 2009.
The actors rekindled their romance later that year (09) and Green proved he's serious about the relationship by popping the question for the second time during a romantic beach vacation in Hawaii earlier this month (01Jun10).
The Transformers star accepted but their celebrations came to an abrupt halt when the two-carat engagement ring slipped off her finger and got lost in the sand at the luxurious Four Seasons Hualalai hotel on the Big Island.
An eyewitness tells Us Weekly magazine, "I saw her jumping up and down. Later, I saw a half dozen staff sifting through the sand.
"Security and maintenance staff spent a couple of hours looking for it. No one found it."