Modi, 58, revealed that the pair are together on Instagram with a series of photos and a caption that describes Sen, 46, as his "better looking partner".
He described a "new beginning, a new life finally" for the pair, and said he was "over the moon".
However, Modi clarified that despite confirming they are in a relationship, they are not yet married or engaged.
"In love does not mean marriage YET," he wrote, adding in upper case: "BUT ONE THAT BY GODS GRACE WILL HAPPEN. I JUST ANNOUNCED THAT WE ARE TOGETHER."
On Twitter Modi added: "Just for clarity. Not married - just dating each other. That too it will happen one day."
Modi was the founder and first chairman and commissioner of the Indian Premier League, he headed the tournament for three years until 2010. He moved to London in the same year, after India's Enforcement Directorate accused him of financial irregularities.
He was married to Minal Modi from 1991 until her death in 2018. The couple had two children, Ruchir Modi and Aliya Modi, and the businessman is step-father to Minal's daughter Karima Sagrani.
Sen was crowned Miss Universe in 1994 and went on to forge a career in Bollywood, starring in successful films such as Main Hoon Na, Biwi No. 1 and Samay: When Time Strikes, as well as her turn as the titular character in the popular television show Aarya (streaming on Disney+ Hotstar).
The announcement of their romance seems to have taken the actress's brother Rajeev Sen by surprise, who told India Today: "I am pleasantly surprised too. I will speak to my sister about this."
Sushmita Sen's Miss Universe journey
Sen made history in 1994, when she was only 18 as the first winner from India to win Miss Universe.
Her journey to the crown began after she won Femina Miss India the same year, beating out the favourite Aishwarya Rai.
At the Miss Universe contest in Manila, she ranked third overall in the preliminaries behind Miss Colombia and Miss Venezuela.
Scroll through the gallery for all the Miss Universe 2022 contestants who've been named so far: