The engagement ceremony took place at Bachchan's Mumbai residence, Jalsa, between 8.30 p.m. and 9 p.m soon after the couple returned from the premiere of their latest film Guru in Toronto and New York.
Confirmation of this came from none other than Abhishek's father, film icon Amitabh Bachchan, at whose residence here the engagement took place.
"The children have decided. We are very happy and thought we should go ahead with the ‘roka' ceremony. It was held in the evening," Amitabh Bachchan was quoted as saying.
Among those present were Amitabh Bachchan, his wife Jaya Bachchan, the family's close friend and Samajwadi Party General Secretary Amar Singh, Aishwarya's parents, and industrialist Anil Ambani with his wife Tina Ambani.
The engagement came nearly one-and-half months after Abhishek and Aishwarya Rai Rai, accompanied by Amitabh and Jaya, offered prayers at the Kashi Vishwanath Temple and Sankatmochan Temple in Varanasi on November 26, heightening speculation about a marriage between the younger Bachchan and the actress.
There had been considerable speculation in the media about marriage between Abhishek and Aishwarya Rai, but neither family had confirmed it before the engagement ceremony last evening.
However, there was no immediate word on the wedding date, industry sources said, adding Abhishek popped the question after the international premiere in Toronto Friday of Bollywood film "Guru" featuring the duo in the lead roles.
Speaking to reporters at Toronto, Aishwarya, a former Miss World, had earlier pleaded with them not to jump to conclusions about her relationship with Abhishek, saying an announcement would be made at the appropriate time.
Aishwarya had in the past been romantically linked to actors Salman Khan and Vivek Oberoi. However, reports had been flying thick and fast for the past few months that she and Abhishek were about to tie the knot.
But now all speculation can be put to rest and the film industry can gear up for what is likely to be perhaps the biggest wedding of Bollywood. The couple, along with Amitabh, Amar Singh and Amitabh's daughter Shweta Nanda, have now flown to the temple town of Ujjain to take a holy dip.