Blake Lively has called time on her bitter two-year legal battle with Justin Baldoni, in a surprise move just two weeks before the case was set to go to trial, the Daily Mail can exclusively reveal.

The actress, 38, finally reached a settlement with Baldoni's production company,  Wayfarer Studios, as well as his PR agency, over claims of retaliation and breach of contract relating to their 2024 movie It Ends With Us.  

In a joint statement released on Monday, the pair said the film remained a 'source of pride' to all who worked to bring it to life and emphasized its mission to raise awareness for domestic violence survivors. 

'We acknowledge the process presented challenges and recognize concerns raised by Ms Lively deserved to be heard. We remain firmly committed to workplaces free of improprieties and unproductive environments,' they added. 

The statement did not include an apology from either party, who have been locked in a messy court battle since December 2024, when Lively first launched her multimillion-dollar suit.

Instead, Baldoni and Lively's teams said it was their 'sincere hope that this brings closure and allows all involved to move forward constructively and in peace, including a respectful environment online.'

Wayfarer, It Ends With Us Movie LLC, and The Agency Group (TAG PR) are said to be ecstatic at the way in which this matter was resolved.

The surprise settlement comes after a judge last month sensationally gutted Lively's case, dismissing ten of her 13 claims, including all of the sexual harassment allegations. 

The trial was still due to kick off on May 18, but covering only three counts: retaliation, aiding and abetting retaliation, and breach of an agreement, known as the Contract Rider.

The ruling also meant that Baldoni was no longer a named defendant in the case.

Instead, Wayfarer, along with the company he set up to make It Ends With Us and TAG PR, was due to go on trial for the alleged 'smear campaign' against Lively. It denied the claims.

Baldoni and Wayfarer had countersued Lively and her husband, actor Ryan Reynolds, for $400 million, accusing them of defamation and extortion. The judge dismissed the claims last June.

In a pre-trial hearing last week, Lively's attorneys argued that the actress had lost tens of millions in endorsements on top of nine-figure hits to her earnings and profits - figures Wayfarer's side has dismissed as wildly inflated. 

Wayfarer's attorneys denied having any responsibility for her losses and claimed Lively was already a 'bully' with a history of failed business ventures.

The company's lawyer, Amir Kaltgrad, also claimed the calculations from Lively's experts about her lost earnings were speculative.

He told the court the estimated figures were 'pie in the sky,' broken down as: $143 million in lost profits, $132 million in lost earnings and several million more for lost endorsements. 

The attorney argued her team made an 'unrealistic assumption' about how much work Lively would get in the years after It Ends With Us.

Kaltgrad noted that Lively only earned $21 million from four film projects in the eight years leading up to the release of the 2024 movie.

He also argued that in one case, it was Lively's business decisions that caused her economic harm, not the firm.

He claimed her non-alcoholic drinks line Betty Buzz 'did not succeed for nothing to do with the defendants,' pointing out that that her own accountant, Jeffrey Kinrich, said as much.

Lively herself admitted that the brand was failing in a previous court filing. 

Another of Wayfarer's lawyers, Fabien Manohar Thayamballi, disputed the claim from Lively that online comments calling her a bully were solely the result of digital manipulation.

The attorney noted Lively had been an aggressor herself, pointing to when she apparently mocked Kate Middleton in March 2024 after the Princess of Wales posted a family photograph that was later revealed to have been digitally altered, sparking global headlines.

The multimillion-dollar lawsuits painted a portrait of a troubled production, with an A-list star asserting herself over a relatively inexperienced director who allegedly struggled to push back on her growing demands.

At the center of the case were several incidents Lively claimed amounted to sexual harassment, including: Baldoni allegedly adding unscripted sexual moments, one of his personal friends playing a doctor during a birthing scene on an insufficiently closed set, and the movie's producer, Jamey Heath, allegedly barging into her trailer while she was topless. These allegations were thrown out.

Filming began in 2023 then paused for several months due to the Hollywood writers' strike.

But before production resumed, Baldoni was forced to attend a meeting at Lively's house in New York, where he claimed her husband, Ryan Reynolds, 'berated' him for mistreating his wife.

Among the others who were present were Lively's now former best friend, Taylor Swift, and Hugh Jackman, as Reynolds tore into Baldoni for 'fat shaming' his wife by asking her personal trainer about her weight.

Baldoni ultimately signed a 17-point agreement presented to him in order to get the film back on track - later claiming he did so under duress.

Explosive case filings later offered a glimpse into Lively's relationship with Swift, whom she infamously referred to as one of her 'dragons', alongside Reynolds. 

Baldoni argued that the threat of having two such huge superstars turn on him was the reason he ceded so much control to Lively.

At times, the pair's friendship did appear unwavering. Text messages submitted as evidence show Swift texted Lively on December 21, 2024, saying: 'You won. You did it.' 

She then sent the actress a link to a news report about talent agency WME dropping Baldoni, citing Lively's filing with the California Civil Rights Department in which she accused him and others of sexual harassment and a 'coordinated effort to destroy her reputation.' 

Swift told Lively: 'You you f***ing helped so many people who won't have to go through this ever again.' 

In a reference to the negative publicity towards Lively during the promotion of the film, Swift said: 'Never has a cancellation been reversed so fast.

'You guys don't understand how rare this is. To have proof and to take the perfect steps to bring that truth to light.' 

Lively replied: 'Like. My. God'. Another message read: 'I love you so much. I would not be ok through any of this if it weren't for you.' 

But just weeks earlier, Lively had sensed something was off and on December 4 2024, shortly before the end of Swift's Eras Tour, she asked her: 'Is everything OK?

'I felt like a bad friend lately because I was such a sad sack who only talked about my own s*** for months'.

Swift replied that Lively was 'not wrong, but it's also not a big deal'.

Speaking outside court last week, Lively's lawyer Sigrid McCawley had poured cold water on the prospect of any last-minute settlement.

'Blake's been ready for this trial, it's a moment she's been waiting for a long time, to have her voice heard in this court,' she said.

'She's feeling really good…she's finally at a point where she will be able to tell her side.'

It Ends With Us, an adaptation of Colleen Hoover's bestselling 2016 novel that begins as a romance but takes a dark turn into domestic violence, was released in August 2024, exceeding box office expectations with a $50 million debut.