The former star of the 1984 series The Jewel In The Crown will become a father for the third time.
He has a 36-year-old son, Oliver, and a 27-year-old daughter, Rebecca, from his first marriage to sculptress Joanna Haythorn.
Dance's fiancée, Eleanor Boorman, a painter, sculptress and former model, confirmed the news on Tuesday.
She told the Daily Mail: "We're expecting a baby. Fingers crossed everything will be fine. We're both thrilled."
A friend of the pair also told the paper: "Charles is pleased and happy at the news."
The pair's engagement was disclosed last September after they first become a couple in 2008. They live together in north London.
Dance, whose first marriage ended eight years ago, was said to be "pleased and happy at the news".
After his marriage ended, he had a relationship with Thunderbirds actress Sophia Myles before he was linked to the 36-year-old former Gucci model Shambhala Marthe.
Marthe described Dance as "great company" and said: "Older men know how to woo a lady."
Dance won a legion of female admirers when he appeared as the suave Guy Perron in the award-winning 1984 TV series The Jewel In The Crown, the series that helped to make him an international star.
He had spent five years with the Royal Shakespeare Company before he secured the role.
He also received critical aclaimfor his portrayal of Josslyn Hay opposite Greta Scacchi in the 1988 movie White Mischief.
Since then, he has been a successful British export to Hollywood, appearing in films such as the science fiction horror movie Alien 3 and opposite Arnold Schwarzegger as the villain in Last Action Hero.
His television work included the BBC's much-praised adaptation of Charles Dickens's Bleak House.
In 2004, he directed Dame Judi Dench and Dame Maggie Smith in the acclaimed movie Ladies In Lavender and has starred in the hugely popular U.S. television series Game Of Thrones, playing Tywin Lannister.
He moved to London following his divorce and the sale of his £2million marital home in Somerset.
The 6ft 3in star still enjoys an outdoor daily swim near his home in the capital.
Miss Boorman, whose grandfather was the wildlife artist Harry Pettit, was brought up in rural Kent and attended Princess Anne's old school, Benenden.
She read anthropology, psychology and economics at Durham and has been commissioned to complete portraits of the Royal Family, with the Prince of Wales being among her many fans.
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