The two outside stones came from the late princess's personal collection and are a poignant tribute to Diana in the year of the 20th anniversary of her death.
At the centre of the ring is a large diamond from Botswana, a country that holds special significance for Harry who has visited many times since he was a child.
It is also a place where the couple has spent time together over the last year and a half, Kensington Palace said.
A beaming Ms Markle showed off the sparkling jewels at an open-air photocall in the Palace's Sunken Garden.
The band is made of gold and the ring was made by Cleave and Company, Court Jewellers and Medallists to Her Majesty The Queen.
Harry is not the only royal to design his bride-to-be's engagement ring using jewels that belonged to his mother.
The Duke of Edinburgh designed an engagement ring for the Queen, then Princess Elizabeth, in 1947.
The Duke had the ring made by the jewellers Philip Antrobus Ltd, using diamonds from a tiara belonging to his mother, Princess Alice of Greece.
He hid the priceless heirloom in a rucksack so he could pop the question on holiday in Kenya.
Source : http://www.liverpoolecho.co.uk/news/uk-world-news/prince-harrys-engagement-ring-design-13960736