The Hollywood stars, who met in 1983, will exchange vows in a ceremony at their ranch near Aspen, Colorado in the New Year, reported Contactmusic.
"It's going to be cowboy hats, horses and rock 'n' roll. All their relatives are thrilled that they have at last decided to tie the knot," a friend of the couple said.
The report also suggests the couple's son Wyatt, who is an actor and former professional hockey player, will serve as Russell's best man.
Hawn recently celebrated her 70th birthday with her close-knit family.