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The singer and "Saturday Night Live" comedian confirmed their engagement in June, just a few weeks after they started dating.
A source tells CNN they're now calling off the wedding.
The pair met while Grande was hosting "SNL" in 2014.
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They made things official after she broke up her ex-boyfriend, the late rapper Mac Miller.
Family: Rapper Mac Miller has died at age 26
Davidson and Grande recently bought a home together, and Grande named a song after him on her latest album.
A Grande source told People magazine that their relationship "was way too much too soon" and that the breakup is "not shocking to anyone."