Kevin Costner's Ex-Wife Confirms Relationship with Mutual Friend Josh Connor

Christine Baumgartner isn't keeping her romance with Kevin Costner's former friend a secret anymore ... shamelessly holding hands in Montecito months after finalizing her divorce.

The actor's now-ex-wife stepped out with financier Josh Connor Tuesday -- walking out hand in hand in public ... while rocking sporty attire for a stroll around the ritzy SoCal town ... and they're not shying away from the PDA here.

There wasn't any kissing as far as we can tell ... but CB and JC were all over each other, hand-holding and even wrapping their arms around each other's waists.

Of course, rumors about Christine and Josh were swirling just months after Christine filed for divorce last May -- when they went on a Hawaiian vacation in July. Sources connected to the Costner divorce said the two were just friends at the time ... although, some called BS.

Baumgartner later made similar statements in court ... claiming she didn't go on a romantic trip with Josh -- although it seems their relationship's pretty dang romantic these days!

Christine and Kevin put the final touches on their divorce in February ... ending one of the messiest Hollywood splits in recent history. Settlement details weren't revealed at the time, but we know a judge validated the contentious prenup.

BTW ... the exes asked for joint custody of their three children -- and, a court ruled Baumgartner should receive a hefty $63k in child support from the Yellowstone actor. Ultimately, looks like Christine and Josh moved out of the friend zone ... and now, they're letting the whole world know it.

"TMZ Investigates: Kevin Costner's Divorce War" -- our documentary diving into the nitty gritty of the divorce saga, including infidelity claims about Kevin -- is available to stream on Hulu.