The 2.00-carat gem, which sits on an 18-carat gold band, was handed in to the Evening News after being found in the street.
Following a front page appeal to find its owners the engagement ring has now been returned to a delighted retired couple.
The pair, who live in Scarborough but do not want to be identified, say getting the ring back has “restored our faith in human nature”.
They had been looking to buy another ring, and were trying on various pieces in jewellers across Scarborough, when they misplaced the engagement ring. Its owner, who is a retired academic and researcher along with her husband, said: “I never thought we would see it again.
“We scoured the streets after we lost it, looking along all the paths everywhere we had been that day.
“We thought it must have gone down a drain or something.
“We reported it to the police, but I didn’t expect to get it back. I thought if someone found it they would keep it.”
The Evening News contacted the police after being handed the ring, however officers said it did not match any records.
After the couple came forward to claim the ring the police later confirmed the husband had in fact reported it missing at the police station.
The husband said: “I was getting my daily paper at the newsagent when I saw the front page of the Evening News and I couldn’t believe what I was seeing. I thought goodness me that’s our ring.
“I took the paper home to show my wife and she couldn’t believe it either. We are just very grateful that someone has handed it in.
“Part of genuinely always thought we would see it again one day.”
Documentation was then provided confirming them to be the owners of the ring.
The couple had wanted to pay a reward to whoever handed the jewellery in, however it was done so anonymously.
Instead they have decided to make a £500 donation to the Castle Community Office based in the Market Vaults.
The ring’s owner said: “I think they are a really worthy cause as they do a lot to help the community.
“I myself have been there for computer lessons and they do a wonderful job helping people in all areas of life.
“I know they are struggling with funding so hopefully this will help them. It is a donation in honour of the kindness and good nature of whoever handed in the ring.
“I am so delighted to have it back, it will never leave my finger again.”