She accepted a proposal from Matthew Mosshart - brother of musician Alison Mosshart - as they enjoyed a holiday in Anguilla.
Osbourne, who revealed the details of the engagement in an interview with Hello! magazine, also told how the ring is intended to look like one of her father Ozzy's items of jewellery.
"I designed it to look like an earring that my father wore," said Kelly, who also posed with her fiance for the magazine at the spot where they became engaged.
"I used to hold my finger up to his ear when I was little and say: 'I want a ring like that'. Now I have one!"
The couple met when they attended the 2011 wedding of Moss and Jamie Hince, who is part of musical duo The Kills along with Matthew's sister.
"I knew she was 'The One' pretty early on," said Matthew.
And Kelly added: "I've never felt this close to another human being, ever. People say we're co-dependent but we just want to be together all the time."
He moved from New York to Los Angeles to allow them to be together more often.
Kelly said: "Matthew made the biggest sacrifice anyone's ever made for me, to move away from everything that he knew to be with me in LA.
"Long-distance relationships often don't work out. We'd dated for a year and knew we wanted to be together. Matthew has broken down every one of my walls. There's nothing I wouldn't do in front of him."
She also talked about the temporary separation of her parents - Black Sabbath star Ozzy and X Factor judge Sharon - due to his drinking.
Kelly said there is no question of a permanent split.
"As if my mother would ever leave my father! They were never getting divorced, they were separated," she explained.
"As Mum said, 'you're drinking again and I'm not going to talk to you,' like any normal person would do.
"Then Dad got himself together. He's been under a lot of pressure - the new Black Sabbath album, my brother's MS... Things can get too much for addicts to handle."
:: The full interview is in the new edition of Hello! magazine which is on sale now.