Actress Nicole, 40, and the country and western singer are said to have broken the happy news to their families over Christmas. No arrival date has been announced for the baby.
Oscar winner Nicole already has two adopted children, Isabella, 14, and 12-year-old Conor, with ex-husband Tom Cruise.
Just months ago, Urban, 40, declared his drinking days were over after a spell in rehab.
The New Zealander checked in to a US clinic less than four months after their wedding in June 2006, and had earlier battled cocaine addiction.
Nicole admitted it had put a strain on their relationship, but said his problems were now under control.
She said: "They say the first year of marriage is the hardest. Well it's 18 months now and everything is fine. Please God it will stay like that."
And yesterday she spoke glowingly of her hopes for the future with the Grammy-winning singer.
She said: "I turn down films because I don't want to be apart from him. It's a wife's place to be at her husband's side, after all.
"So I go on tour with him when he is performing and I sit in the dressing room and sew buttons on and make his tea. Afterwards we go back to the hotel room, switch on the television and fall asleep on the sofa.
"He says I am the most important person in his life, and he is certainly the most important person in mine."
She told Weekend magazine: "My dream is that we live a long life and become old people together."
Nicole is currently wowing audiences as the glamorous villain in The Golden Compass and has just finished filming Australia, Baz Luhrmann's new romantic epic.
She is due to film The Reader with Ralph Fiennes next month, but has spoken of "winding down" to focus on family life. Urban has tour dates throughout 2008.
Following her divorce from Cruise in 2001, Nicole admitted she had suffered an ectopic pregnancy and a miscarriage during the marriage.
A spokesman for Kidman yesterday denied she was pregnant.
He said: "As far as we're concerned it is another rumour."
TAGS:Nicole Kidman, Keith Urban, Nicole Kidman
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