At a news conference in Paris Friday, Cruise announced that he had popped the question to Holmes early in the morning atop the Eiffel Tower.
"Yes, I proposed to her," the Mission: Impossible star said.
"It was early this morning at the Eiffel Tower, so I haven't slept at all," he said. "Today is a magnificent day for me, I'm engaged to a magnificent woman."
Holmes, sporting a hefty engagement ring, watched her fiancé from the audience, exchanging smiles and blushes with him as he spoke.
Cruise was in Paris promoting the release of his upcoming film, War of the Worlds. He said he chose the Eiffel Tower as the location to propose because he had never been there before.
"It's Paris, it's a beautiful city, it's very romantic," Cruise said.
"It's definitely love and France. I've never felt like this before. She's an extraordinary woman, and I love her very much."
Cruise said that no wedding date had been set.
"We haven't discussed that--one step at a time," he said. "Let's see. We're not sure."
Holmes did not speak at the press conference, but later told Reuters that she was "so happy" about the situation.
The twosome otherwise known as TomKat have been the target of rampant speculation over whether their coupling is contrived ever since they went public with their relationship in April.
Skeptical types have suggested that the couple paired up in order to promote their summer blockbusters. (Holmes' Batman Begins opened Wednesday and Cruise's War of the Worlds unspools July 29.)
Both Holmes and Cruise have repeatedly shot down suggestions that their relationship is a sham, insisting that their shared love is the real deal.
Holmes has even been studying up on her beau's religion of choice, the Church of Scientology.
"I'm so happy. I truly feel like the luckiest woman in the world," Holmes told USA Today earlier this month.
Last week, Cruise indicated that a proposal was forthcoming, telling Entertainment Weekly, "It's gonna happen, man. It'll happen."
Apparently, the actor is a man of his word.
It will be the third marriage for Cruise, whose previous marriages to actresses Mimi Rogers and Nicole Kidman ended in divorce, and the first for Holmes, who broke off her engagement to American Pie star Chris Klein in February.
For Holmes, her engagement to Cruise is something of a dream come true. The former Dawson's Creek star has said she grew up with a poster of Cruise on her wall and always fantasized about marrying him.