The 49-year-old – who is mother to Damian's three sons, aged 16,12, and seven – is in a new romance with 59-year-old Tim Spicer, a former mercenary.
Just hours after the news broke, the lauded artist went ahead with a party to celebrate his 47th birthday, held at his £3.5 million farmhouse in Combe Martin, North Devon.
Tim's former wife Caroline told The Daily Telegraph that Mia and her new love are "incredibly happy" and have been together for at least eight months.
She added: "I don't think Damien is that upset. They have had quite a relaxed relationship for quite a long time."
Mia is understood to have only told Damien, who is worth an estimated £215 million, of her new romance quite recently.
Tim is a former Lieutenant Colonel in the Scots Guards. He moved into private security, undertaking contracts from the US government in Iraq and Afghanistan.
He was paid £22.5 million to suppress a rebellion in Papua New Guinea and was in the spotlight during the 'Arms to Africa' scandal.
The former army man was accused of breaching a UN embargo by shipping weapons to Sierra Leone, but he maintains that he and his company Sandline did nothing illegal.