Yes, most businesses prohibit this. But enlightened ones (they are out there) will transfer the junior person elsewhere in the organization. Not ideal, but the alternative (no job) is worse.

As the woman, you were already the boss.

A woman in charge... thats sexy :)

As usual, we need more information. How big is the company? Is there a division/location he could laterally transfer to? I'm assuming from the fact it's an FML that company policy forbids it. Odds are, if she'd said she was dating him when they offered her the position, they would have nixed the promotion on the spot. At any corporate level, supervisors dating direct subordinates is a fairly severe liability. On an ethical gray-zone, you have NOT told another soul at the company? If so, and you trust him, then just play the double-life game until he (or you) find another employment arrangement. Alas, if your relationship goes south, and he's an ass, he is capable of getting you both fired, and possibly putting a Sexual Harassment charge permanently in your employment record, as well as the company's public record. Lose-Lose. <crossing fingers OP actually comments>

This would be more of an FML if you'd been promoted AFTER telling everyone.

Had a women boss once, never ever again.

People like to think they're being sneaky and under the radar, but I'm betting everyone already knows that OP and her coworker are involved. Better to set the record straight and see about transferring one of you than let rumors run wild and damage both your reputations. If you are already involved with one colleague and haven't been open about it, you can bet any troublemakers will already be spreading nasty rumors about how you got that promotion. Ugly, but true.

My girlfriend was my boss for a time. Not as bad as it seems as long as you both can keep it professional. Should be ok, OP.