Kate Middleton's younger sister has not been pictured with an engagement ring, but a magazine reported that Nico, 36, who works for Deutsche Bank, popped the question while the couple were on holiday in India earlier this month.
"It was exactly how he planned it," the insider told Us Weekly. "Very romantic and grand."
A source added that they were planning to to spend Boxing Day together at the Middleton's Bucklebury estate before jetting off to the Alps for New Year.
Speculation that Pippa and Nico were set to walk down the aisle started in July, when a source close to the couple stated, "An engagement is definitely on the cards."
The eligible brunette is reported to have told her friends that Nico was "the one".
The columnist and her beau were first romantically linked at the beginning of the year when Nico joined the Middletons on their annual family break in the Caribbean. At the time, Pippa and Nico were snapped enjoying a romantic stroll on the Mustique beach.
While Pippa has been linked to aristocracy in the past, with suitors including investment banker James Matthews and financier and former England cricketer Alex Loudon, Nico has a distinctly humble background.
He grew up in a middle-class red-brick terraced house in Folkestone, Kent, and attended the Harvey Grammar School in Folkestone, before earning a business degree at Kingston University.