What you have mentioned about your relationship with your relative and the haraam actions that you committed is something that is very regrettable when it happens among Muslims. It is indicative of fathers’ and mothers’ shortcomings in protecting their daughters and preventing them from mixing with men, and being careless with regard to relatives concerning this matter.
We praise Allaah for having given you insight into your mistakes and enabling you to repent and regret it and seek forgiveness. We ask Him, may He be glorified, to forgive you and accept your repentance.
You should find out the reasons why this girl wants to cancel the engagement. You could delegate this task to one of your female relatives. There may be reasons that can be remedied.
If the girl insists on her position, then all you can do is be patient and seek reward, and perhaps that will be better for you, because one does not know where good will be, and with whom he will find happiness.
You should also pray istikhaarah, asking Allaah for guidance, and ask Allaah to help you to get married to a righteous woman.
Beware lest you be one of those who are weak in faith, who – when they miss out on something they had wished for – lose their strength and willpower, and indulge in haraam things, or they fail to do obligatory duties, or they announce their withdrawal from life. That is the attitude of those who are hopeless and filled with despair. But the believer knows that everything happens by the will and decree of Allaah, and that he will never get anything but that which has been decreed for him. Hence Allaah says (interpretation of the meaning):
“No calamity befalls on the earth or in yourselves but it is inscribed in the Book of Decrees (Al‑Lawh Al‑Mahfooz) before We bring it into existence. Verily, that is easy for Allaah.
23. In order that you may not grieve at the things over that you fail to get, nor rejoice over that which has been given to you. And Allaah likes not prideful boasters”
[al-Hadeed 57:22, 23]
We ask Allaah to guide you to what is good for you and make it easy for you wherever it may be, and to enable you to have a happy and successful marriage by His leave.
And Allaah knows best.