the line is engaged is correct.....

In New Zealand we would say that "the line is engaged"

Got it. Thank you Maria!

You could say that "the line is busy" since you are asking about a common expression that is really, really used. This is for American English. I do not understand what you mean by "one", are you refering to an other line? In that case you could also say "he/she's on the other line right now"...