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American Idol Alums Kat & Alex Are Engaged! — See the Photos of a 'Dream Come True'

Doltyn Snedden Kat & Alex

Congratulations Kat & Alex!

American Idol contestants Kat Luna and Alex Garrido— who auditioned as a duo last season — are engaged, PEOPLE can exclusively reveal.

Kat & Alex talk to PEOPLE about their big moment, which happened at The Sound Emporium, where the two created their first EP. (And both of their families were present!)

"I pondered a lot about when would be the right time to propose to Kat," Garrido, 26, tells PEOPLE.

Garddio explains that the two went down to Miami, where their families live, to shoot a music video and he came up with the idea to bring their relatives back with them to help them move into their new apartment in Nashville. He plotted recording an "acoustic version" of their track "Make Me Make You" — and that's when he asked the question!

Doltyn Snedden Kat & Alex

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"Kat and I performed the song in the live room and during the bridge of the song I dropped down on one knee and popped the question in front of our family and friends," he says. "I told her how much I loved her and how I want to always be the best man that I can be for her."

Garrido says that Luna thought it was a prank, but once she realized "it was all very real," she started to cry.

Doltyn Snedden Kat & Alex

"It was a powerful moment proposing in the same room where our careers in Nashville started," he adds. "Not to mention some of our favorite musicians performed in that same room like John Mayer and Chris Stapleton. "

Luna, 20, says she's excited for the new chapter in their lives — and she loves the ring Garrido chose for her, too!

"When Alex got down on one knee and I saw the ring I couldn't believe that he got the ring of my dreams," she says. "It is exactly what I wanted down to the little diamond halo underneath."

"I am most excited about getting to spend the rest of my life with the man of my dreams and getting to travel the world inspiring others with the one I love," she says.

Doltyn Snedden Kat's ring

Garrido echoes her loving feelings about the musical duo's next chapter.

"Being able to marry my best friend is a dream come true," he says. "I cannot wait to continue to make unforgettable memories with her and travel all over telling everyone our story."

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On American Idol last year, the two were separated after performing Lauren Daigle's "You Say," when Garrido was eliminated. Luna continued to the third round as a soloist.

"Since American Idol, our love for music and one another has continued to grow stronger," Luna says. "After getting off the show, we started writing more songs together."

The duo has since signed a publishing deal and has recorded its first EP. They also dropped their debut single "How Many Times" this year — and a Spanish version earlier this month.

But when did they know they were the ones for each other?

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"When he stepped on that church stage my heart skipped a beat, and I just knew he was the one," Luna says. "Once we collaborated and hung out it was just more reassurance that God put the man I had always dreamed of in my life. I couldn't imagine my life without him!"

"It's funny when you hear that saying, 'When you know you know,'" he adds. "I never thought I'd actually experience that until I met Kat... I fell for her the moment we first sang together."

Doltyn Snedden Kat & Alex

The two keep God "in the center" of their relationship and say that music plays a huge role in keeping the two strong.

"If you are loyal to one another, and you are truly transparent, nothing can get in the way of your relationship," Luna says.

"We spend a lot of time together creating something that means so much to us," Garrido adds. "We feel that it makes our relationship that much stronger. Music truly brings people together."