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The 24-year-old singer and 21-year-old model and daughter of actor Stephen Baldwin have not commented.
"They are engaged and it happened Saturday night in front of a crowd in Baker's Bay," a source told E! News exclusively. "Justin made arrangements for the ring when they were in NYC and knew that he wanted to propose to her. It was a sudden decision but Justin always knew Hailey and him had a special bond that was incomparable."
"The proposal was a very happy moment and Hailey was taken off guard," the source said. "Her face was in shock but you could tell they are both so in love."
Another source told E! News, "They are engaged. It happened while on vacation at Baker's Bay. They flew in from New York on the 6th and have been having the time of their lives. Justin is happier than ever and wants to be with Hailey. His family is very supportive and know he has been at his best lately. Everyone is very happy for him."