The couple got engaged during the Easter weekend but a spokesman for the prime minister confirmed the engagement on Friday.
Ms Ardern, 38, met Mr Gayford, 41, at an awards event in 2012, and last year she gave birth to their first child while in office, daughter Neve Te Aroha Ardern Gayford, who turns one next month.
New Zealand media reported that Ms Ardern was seen wearing what appeared to be a diamond ring while attending a ceremony on Friday, but she wore it on her middle finger.
It is understood she had been wearing the ring since the engagement.
Last year she was asked by the BBC if she could imagine proposing to Mr Gayford, the host of a TV fishing show and affectionately known as New Zealand’s “first bloke”.
She replied that she wanted to “put him through the pain and torture of having to agonise about that question himself”.
Ms Ardern has been praised for her leadership after 50 people were shot dead at two mosques in the South Island city of Christchurch in March.
She moved quickly to tighten gun laws and also strongly criticised the role social media platforms played in the terror attack.
Six months earlier, she announced herself on the global stage by appearing at the United Nations General Assembly with baby Neve.
