Michael Sheen :"Rachel McAdams's "Fantastic Actress"

Rachel McAdams and Michael Sheen who are co-stars in Woody Allen's new film, "Midnight in Paris," have confirmed they are dating, following months of speculation.

"We spent our nights really laughing, and walking around Paris, Notre Dame is my favorite spot, and having great meals. It was a great way to get to know anyone," Sheen told Us Weekly. "Rachel McAdams's the most wonderful person I know. We got to know each other on set, it was an amazing time. We've been a couple for a while now."

The British actor also said that Rachel McAdams is a "fantastic actress" and the pair have already begun working together again in director Terrence Malick's next project, which is currently filming in Louisiana.

"We love going to little diners, out of the way places, so we found some great little spots out in Louisiana," Sheen said. "My favorite meal is breakfast!"

Rachel McAdams and Sheen made their first red carpet appearance as a couple at the Cannes Film Festival on Wednesday for the premiere of "Midnight in Paris."

Rachel McAdams stars opposite Owen Wilson in the film, which tells the tale of an engaged couple, who travel to Paris and while McAdams gets charmed by the repugnant intellectual Paul (Sheen), Gil (Wilson) wanders the streets of Paris and finds himself traveling back in time to the 1920s each night, to the very era he's romanticized.

Last November, Sheen was photographed holding hands with Rachel McAdams in Toronto, fueling rumors that the two were dating. They were also spotted together at an after party at the Toronto International Film Festival.

Sheen comes across as being quite smitten by the actress, who sparked engagement rumors recently when McAdams was spotted wearing what looked like an engagement ring, but Sheen's rep denied to E! News.

"She's a genuinely lovely lady as well as being stunningly beautiful and very talented," Sheen, 42, told "Entertainment Tonight Canada" of McAdams, 34, People reports.

Meanwhile, McAdams told Elle magazine recently that her parent's happy marriage made her disillusioned with what love is.

"You grow up and you assume that everyone is like that, and you quickly realize that they're not," Rachel McAdams told Elle magazine recently. "And then you have those days when you wonder if you're going to find it for yourself. It's such a hard thing to find. I think it was more that realization that rocked me." (S)