Douglas, 55, proposed to the 30-year-old Welsh actress on New Year's Eve at his home in Aspen, Colorado.

"While no date has been set, they plan to wed later this year. He's now given her a ring,'' said Allen Burry, Douglas' publicist.

Todd Adair, who represents Zeta-Jones, said the marriage proposal came with a "big ol' diamond ring.'' "She's ecstatic, thrilled and very, very happy,'' Adair said.

The relationship was said to be on the rocks just last month when Zeta-Jones opted to spend Christmas in Wales. Douglas showed up in time to join her for the holiday.

The two met at the Deauville Film Festival in August 1998 and have been dating since March 1999. They share a September 25 birthday.

In December, the actress, who has starred in "The Mask of Zorro,'' "The Haunting'' and "Entrapment,'' said she was in no hurry to marry the star of "Fatal Attraction'' and "Basic Instinct.'' She told Harper's Bazaar then that "there are no words of marriage.'' Douglas separated from his wife of 22 years, Diandra, in 1997.

Altar bound: Michael Douglas and Welsh beauty Catherine Zeta-Jones announced their engagement yesterday. The couple recently spent a few days over the Christmas holiday in Bermuda before flying out to Colorado.