The actor, 45, already a father of three, performed at a New Year's Eve party at AnQi in Orange County, Calif., where the joyous pregnancy announcement was made shortly after midnight.
During his time on stage, Howard's wife was seen "rubbing her belly" from the crowd, an observer tells Us.
Following the spirited performance, the restaurant's owner Elizabeth An -- a close friend of the couple -- asked the evening's musical guests to come back onstage. According to the eyewitness, Howard grabbed his wife as An told the crowd: "Terrence and Mira are expecting their first baby!"
The observer tells Us that Mira "glowed with joy" while revelers roared in response to their happy baby news. Howard was also snapped affectionately cradling his wife's baby bump while the announcement was made.
The Red Tails star married his third wife in late 2013, months after finalizing his ugly divorce from second wife Michelle Ghent. Howard was also previously married to Lori McCommas for 13 years until 2005. They share three children -- Aubrey, 21, Hunter, 19, and Heaven, 17.