The couple - who announced their engagement in February 2009 after over a year of dating - are planning to separate for a short period before reassessing their feelings for one another.
A source said: "They are taking about a month off and will then revisit their relationship to decide if they should stay together."
The 28-year-old actress confirmed the split on Wednesday (16.06.10) when she showed up to the Take No Prisoners event in Los Angeles, which she co-hosted, without her engagement ring.
When asked how the wedding plans were going, she pointed to her left hand and told Us Weekly magazine: "No, no plans. No nothing."
The couple - who met on the set of the movie 'Jumper' - are believed to have broken up two weeks ago.
Rachel has previously spoken of her desire to have children with 29-year-old Hayden.
She said: "I don't need to get married right now. I am more ready for a baby than marriage. Not really tomorrow, but definitely in the next couple of years which is the pretty near future. You have to have the guy, you know?"
When asked if she had found the future father of her children, Rachel replied: "I am happy where I am."