The model and the actor were first linked together earlier this month.
The source adds, “Things are going well between them and they're both happy."
Hadid, 27, and DiCaprio, 47, have been the talk of the town since they were spotted earlier this month hanging out in New York City during Fashion Week. The pair was seen with each other at Casa Cipriani and "looked very flirty," according to a source.
"They were sitting in the dining room area and were canoodling and having a fun night out with each other," the source described.
Another source said of their outing, "Gigi arrived at Casa Cipriani a while after Leo did. They like going there because they can be private and not worry about pictures being taken of them or people noticing them too much. They are having a good time together and Leo is very attracted to Gigi."
The sighting came after a source confirmed that the supermodel and the Oscar-winning actor are dating "and into each other."
DiCaprio and Hadid’s romance comes a little over a month after it was confirmed that the actor ended things with Camila Morrone. The pair split up in August, after dating for four years.
Hadid’s new relationship is her first public relationship since ending things with her ex-boyfriend and the father of her child, Zayn Malik, in 2021. Over the weekend, the model celebrated their daughter, Khai's, second birthday, and tagged Malik in the post.
"Our angel girl turned two today," Hadid wrote, showcasing a brightly colored Peppa Pig cake by Cake Boss' Carlo's Bakery. She later revealed on Instagram that Malik threw the party.