The couple, who announced the happy news in an interview with OK! magazine, are already parents to eight-year-old daughter Lily, and have revealed they've been wanting to give their daughter a little sibling for a while.
In the interview, the 42-year-old actor shared the couple's 'frustating' struggle to conceive.
'We've been trying to get pregnant for around two years but it just wasn't happening,' James said. 'We'd just started going down the fertility route and were only three months into that when it happened without any intervention.'
James' fiancée Nancy, who had to undergo a procedure before getting pregnant, praised the soap star for the support he gave her during their struggle to conceive.
Just a couple of weeks before getting pregnant, Nancy underwent an hysterosalpingogram - an x-ray examination used see if there are any blockages in the uterus and fallopian tubes that could prevent eggs passing down to the womb and thus stop pregnancy occurring.
'I'm a worrier and I get stressed so he definitely helped me through it more than I helped him', Nancy said of James, adding: 'He's my rock.'
Speaking of the procedure, James said they had high hopes that it would work for them: 'The doctor said they get quite a high number of people falling pregnant just after that one very simple procedure, so it was what we went for first, and then a couple of weeks later we fell pregnant!'
James Hooton with his co-star Gemma Oaten on This Morning
The dad-to-be has been engaged to Nancy since 2010, but the couple have no plans to tie the knot just yet, joking that their daughter Lilly will 'probably end up getting married before us'.
James, who's been an Emmerdale favourite since 1995, talked about parenthood with Manchester Evening News in 2010, when Lilly was just over a year old.
'All my mornings are early. I'm always up at least three or four times a night,' James said of his first year as a parent.
'But the rewards far outweigh all the sleepless nights. It's amazing to see Lily's development. Day by day there's a change in her.'
He first hoped for a boy when Nancy first told him she was pregnant, but of course he was not disappointed when he found out he was becoming a father to a little girl.
'We found out quite early. We just wanted to know, we couldn't contain our excitement about it. And as soon as you see that little baby, it's a love you've not really had for anything, so it doesn't matter whether it's a girl or a boy. But I would like a boy one day so I can pass my silky skills on to another generation.'
Fingers crossed Lily gets a baby brother - congratulations James and Nancy!