American Idol runner-up Katharine McPhee is engaged to actor Nick Cokas, sources tell PEOPLE.

McPhee, 23, recently has been showing off a ring from Cokas, 42. They have been dating for more than a year.

"Katharine is bubbling over with excitement for her upcoming wedding," a source says. "She is all smiles when she talks about the planning. It sounds like everything is going very smoothly."

The couple met in 2005 when they performed in a Los Angeles theater production of The Ghost and Mrs. Muir. Their union began as a friendship, McPhee told PEOPLE last year.

"He took me up to my San Francisco (Idol) audition," McPhee said. That's when their relationship blossomed. "We totally fell in love," she said.

As for the 19-year age difference, McPhee says that "was never really a concern." The two connect because "he just makes things really fun" and "we love business. We love going to meetings together and create things together."

Case in point: the two will join forces on an upcoming independent film titled The Last Caller. McPhee will star in the dark romantic comedy and Cokas will produce.

McPhee, whose debut CD came out earlier this year, is currently filming the Anna Faris comedy I Know What Boys Like.

McPhee's rep declined to comment.


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