The couple began dating in 1996, Hello! magazine said.
"We are engaged and very happy with that. (Sibylle) is my fiancee and that says everything, doesn't it?" Redford, 71, told a German magazine.
Hello! said the pair hasn't set a date for the wedding.
This will be Szaggars' first marriage and Redford's second. He was previously married to Lola Van Wagenen, with whom he has three adult children. He and Van Wagenen split up in 1985.