The 68-year-old actor says in an interview with ABC television that he asked his longtime companion to marry him and "she's agreed." O'Neal says they will wed "as soon as she can say yes."
The ABC interview with O'Neal airs Friday.
Fawcett was diagnosed in 2006 with anal cancer that has spread to her liver. The "Charlie's Angels" star and O'Neal have a 24-year-old son, Redmond.
O'Neal says the 62-year-old actress is "fighting for her life," but despite her declining health, they will "absolutely" get married.
Fawcett filmed her long battle with anal cancer for more than three years for her documentary, "Farrah's Story," with the help of her best friend, Alana Stewart. Although Fawcett's cancer worsened during the taping, Fawcett insisted on having Stewart continue her video diary.
"Insider" host Lara Spencer sat down with Stewart in May to discuss Farrah's condition, and her experiences filming the documentary.
"She has never given up," Stewart told "The Insider." "What has gotten Farrah through is her faith and her inner strength and her sense of humor, which she still has."
O'Neal, whose romantic involvement with Fawcett has spanned three decades, he's been by her side.
"He walks in the room and she just lights up," Stewart said. "If he is not there, she asks for him, but he is there, he is staying with her all the time, and I think he is like her rock of Gibraltar."
At the time O'Neal said that he wanted to marry Fawcett, but he said she was "hesistant."
"I'm working (on it), though," he told "The Insider." "I'm working. I'm working."
Stewart said that she thinks O'Neal would be overcome by the loss of Fawcett.
"Well, if and when it happens," Stewart said, "I think he will just be beyond devastated. I really do."