Fashion designer and heiress Nicky Hilton is now engaged to her banker beau, James Rothschild.

Paris Hilton's younger sister said she has been "incredibly happy" after Rothschild proposed to her in Lake Como last week.

The couple met at the wedding of Petra Ecclestone and James Stunt's wedding in Italy last 2011. A source close to the pair told UsMagazine.com that Hilton and her banking heir fiancé went on "a romantic anniversary trip" last weekend.

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While on a boat in Lake Como, Rothschild then made the proposal to the 30-year-old heiress by going down on one knee and popping the question. The source described it as "incredibly romantic and beautiful".

The couple's upcoming plans reportedly involve a road trip around Europe to celebrate their engagement. They have currently journeyed through Milan, Rome and, of course, the memorable Lake Como.

Italy is becoming a highly popular romantic destinations for celebrities- Kanye West and Kim Kardashian exchanged wedding vows in Florence this summer, while George Clooney will tie the knot with lawyer fiancé Amal Alamuddin in Italy this September.

Indeed, Hilton's Instagram feed is teeming with happy photos from their tour during the past few days.

Rothschild, who is based in the UK, has reportedly begun planning his engagement scheme earlier this summer. The source told Us Magazine that he flew from the UK to the US to ask permission for marriage from Hilton's parents.

Paris' younger sister was first married in 2004 when she wed Todd Andrew Meister, a childhood friend, at the Las Vegas Wedding Chapel. Annulment was granted to the couple after three months when Hilton admitted that she went for the marriage "on a whim".

She was also in a four-year relationship with David Katzenberg, studio boss for DreamWorks. They called it quits in 2011 when Hilton began promoting her jewelry line in Asia and Katzenberg launched a new production company. The couple cited their busy work schedules as the main reason behind the breakup.

TagsNicky Hilton, Paris Hilton, James Rothschild, Hilton Sisters