Cruise, 50, met Cruz on the sets of their film "Vanilla Sky" (2001) but their relationship ended in 2004, reported Radar Online.
"Tom had absolutely planned on proposing to Penelope, and they had openly discussed marriage during the three years they were dating. Tom was head over heels in love with Penelope and could see them spending the rest of their lives together, and she felt the same way.
"However, Penelope pulled the plug on the relationship because she felt that the Church of Scientology was the third wheel in their relationship. Penelope doesn't have anything against the Church, but it just wasn't her thing. She admired Tom's dedication to it, but it wasn't her cup of tea and wasn't something she wanted to give her life up for," a source said.
Cruise recently split from Katie Holmes, his third wife.