Fonda was recently rumoured to be planning her fourth wedding, to 67-year-old record producer Richard Perry, but a spokeswoman for the actress insisted the pair will not be exchanging vows any time soon.
The couple announced their engagement at a recent party in Malibu, California, according to British tabloid the Sunday Express, and they are hoping to schedule a ceremony around Christmas to give Fonda enough time to recover from scheduled knee surgery.
A source tells the publication, "She made the announcement during a dinner party at the Malibu home of Barbra Streisand and James Brolin and now it's the biggest open secret in showbusiness. She and Richard will tie the knot over the Christmas holidays in what should be a relatively small but magical ceremony."
The publication also reports Fonda plans to invite her second husband - former politician Tom Hayden - and her third spouse, media mogul Ted Turner.
The insider adds, "They want their loved ones around them for an elegant and simple affair that will include Tom and Ted."
Fonda was also married to French director Roger Vadim, who died in 2000.