Michelle confirmed her exciting news during a radio interview, adding that she popped the question while on holiday in the Canary Islands.
Speaking to BBC Radio Leeds, the actress revealed that she got down on one knee following a romantic dinner.
And although her proposal went without a hitch in the end, it didn't actually happen on the day Michelle had initially planned.
Michelle - who plays Vanessa Woodfield in Emmerdale - revealed: "We were in Gran Canaria on holiday and it was about nine thirty at night and I got down on one knee.
"I was very nervous. I was going to do it on Christmas morning, but then we got a phone call from Rosie's younger sister saying, 'Guess what, I'm engaged!' I thought, 'Oh, that's done that then!'"
She added: "I'd had the ring for over a year. My mum is the manager of a jewellers so I'd had it sized and everything. I was thinking, 'I hope it still fits!' and it did."
Michelle has been dating Rosie for two years and, although the wedding won't be this year, it will be a big family affair.
Speaking to Reveal, Michelle recently said that she is proud of her gay relationship with Rosie and would never shy away from talking about it.
"We're not shoving it in people's faces, we're not out to do that, but we've had a lot of response, especially on Twitter, from young girls who say, 'Thank you so much, you're an inspiration,' which is great," she added.
It's a doubly happy time for Michelle, as she has also been nominated for a National Television Award.
The star, who is up for the Most Popular Newcomer gong, tweeted: "Very excited to have made the short list for the NTA's.. Also New Years Eve @rosiebone and I got ENGAGED!!!! Double celebrations this week!"
Congratulations, Michelle and Rosie!