According to the Sunday Mirror, Lily, 25, had her three-month scan this week and was told that everything was fine. The new baby's due date is in December - a year since Lily and husband Sam Cooper welcomed baby Ethel into the world.
A friend told the newspaper: "Lily has started telling her friends and everybody in her close circle is so excited for her.
"It was a surprise but Lily and Sam are thrilled. The pair of them have loved every minute of parenthood so far and wanted to expand their brood quickly. So it's great timing."
Two years ago Lily, who had hits with songs like Smile, LDN and The Fear, had a stillborn baby boy six months into her pregnancy. She had also suffered a miscarriage in 2008 when she was dating Chemical Brothers star Ed Simons.
Since having daughter Ethel, devoted mum Lily has kept a low public profile. But she has recently gone back into the recording studio, having previously said she no longer had any interest in the pop industry. She has also been working on the score for Bridget Jones the musical.
Her friend said: "Bridget Jones was an amazing and different project for her but everything that has happened to her over the past two years has been incredibly inspiring. So it's time for her to start recording and getting the record together.
"But like everything in her life, work comes second to Sam, Ethel and now their bump. She's just so excited."
Huge congratulations, Lily. We hope the pregnancy goes smoothly.