A Buckingham Palace spokeswoman said Tindall, 32, had proposed to Phillips, 29, on last night at the couple's Gloucestershire home.
Zara Phillips is the daughter of Princess Anne and her former husband Captain Mark Phillips.
The announcement comes weeks after news of the engagement of Prince William, third in line of succession to the British throne to Kate Middleton was made public.
The Queen and Duke of Edinburgh are said to be "delighted" by the news. No date has been set for a wedding but the news comes with Prince William and Kate Middleton set to marry on April 29.
Phillips, who is 12th in line to the throne, and Tindall met during England's Rugby World Cup-winning campaign in Australia in 2003.
He also plays for premiership side Gloucester and was named club captain for the 2010/11 season in August, BBC reported.
She has achieved sporting success in her own right, winning individual gold at the World Equestrian Games in Germany in 2006.
Published 21 December 2010, 15:18 IST