The musicians "are expecting a baby and are engaged to be married in a private ceremony later this year," reps for the couple confirm to PEOPLE.
The announcement comes after the two, together since fall 2008, attended Thursday night's Black Ball in London, which benefits Keys's Keep a Child Alive charity.
"They're very happy," says a friend of the couple.
Rapper Swizz Beatz (real name: Kasseem Dean), 31, has produced music for Keys, 29, and worked with artists including Jay-Z, Beyoncé, Jennifer Lopez and Gwen Stefani.
It will be the first marriage for Grammy-winner Keys – and their first child together. Swizz Beatz is father to Kasseem Jr., 3, and son Prince Nasir, 9, both from previous relationships.