The couple will marry in a chapel which has been the venue for royal weddings and christenings over the centuries, including the nuptials of Queen Victoria and Prince Albert in February 1840.
The announcement ends weeks of speculations but the forthcoming wedding has been overshadowed by the scandal that has engulfed Beatrice’s father the Duke of York.
Andrew has retired from public royal duties for the foreseeable future after his disastrous television interview about his relationship with convicted sex offender Jeffrey Epstein.
Beatrice’s sister Princess Eugenie married her husband Jack Brooksbank at Windsor Castle’s St George’s Chapel in 2018, and went on a carriage ride through the streets of Windsor to celebrate.
But it appears that Beatrice’s big day will be a low-key affair.
Beatrice – the Queen and the Duke of Edinburgh’s granddaughter – is ninth in line to the throne, and a cousin of the Duke of Cambridge and the Duke of Sussex.
Her wedding will be the fourth royal one in recent years, following the Duke and Duchess of Sussex’s and then Eugenie’s in 2018, and Prince and Princess Michael of Kent’s daughter Lady Gabriella Windsor’s to Tom Kingston in 2019.
Buckingham Palace said in a statement: "The wedding of HRH Princess Beatrice of York and Mr Edoardo Mapelli Mozzi will take place on Friday 29th May 2020. The couple became engaged in Italy in September 2019.
"Her Majesty the Queen has kindly given permission for the ceremony to take place at the Chapel Royal, St James’s Palace.
"The ceremony will be followed by a private reception, given by the Queen, in the gardens of Buckingham Palace."
Beatrice, who split from her long-term partner Dave Clark in 2016 after 10 years together, appeared with property developer Edoardo, who is known as Edo, at a Pitch@Palace event at St James’s Palace in London, hosted by Andrew in June.
Edoardo is the son of former Olympic skier Count Alessandro Mapelli Mozzi and Nikki Shale, is a count himself, and has been a friend of the Yorks for some time.
Edoardo has a young son named Wolfie with ex-fiancee Dara Huang.
The princess is said to have begun dating Edoardo after meeting him again at Eugenie’s wedding.
Beatrice is not a full-time working royal and is described on Andrew’s website as working in business.
She hit the headlines with the unusual "pretzel" hat which she wore to William and Kate’s wedding in 2011.
It was likened to everything from a toilet seat to a cat flap and Facebook pages sprung up in its honour, attracting thousands of followers.
She auctioned the headwear on eBay for charity, raising more than £81,000 for good causes.
She has a number of royal patronages including Forget Me Not Children’s Hospice, the Teenage Cancer Trust and the Helen Arkell Dyslexia Centre.