According to the US publication, a baby isn't the couple's only major news.
The insider spilled the couple are also gearing up for a big move. After splitting his time between their two homes, Danny is finally moving back into the family's Malibu mansion.
'Prior to the baby news, Julia and Danny were at each other's throats,' says the insider, explaining that the actress felt that Danny 'wasn't there for her' after her mother's passing in 2015.
Meanwhile, the insider says that Danny was 'jealous' over rumours that Julia was spending time with her Pretty Woman co-star Richard Gere.
'They were in crisis mode,' the source says.
'Julia eventually realised that she didn't want her marriage to end,' the insider spills. 'She wanted to work on their relationship, and most of all, have another baby.'
Given her age, Julia knew the chances of getting pregnant were slim.
So when she found out that the latest round of IVF treatment had worked, 'they took it as a sign that they needed to remain a family.'
'This baby has revived their commitment to each other and reminded Julia how much she loves Danny and vice versa.'
'They're so excited they can't wait for what the future holds.'
Julia is yet to respond to OK!'s report.