Jude Law and Sienna Miller
11/12/2006 AT 06:45 PM EST
Jude Law and Sienna Miller have finally split for good, a source close to the pair tells PEOPLE exclusively.
"It's a mutual decision," a pal of the actor says of ending the roller-coaster romance.
"They have definitely come to the end of the road. They tried to make it work but it failed."
Reps for both Miller and Law refused to comment on the private lives of their clients.
Law, 33, and Miller, 24, were engaged to be married in 2004 but Miller broke off the relationship
after his affair with his children's nanny, Daisy Wright, was exposed the following year.
Law was divorced from his actress wife Sadie Frost in late 2003 and the couple have three children and another child from Frost's previous relationship. The actor's closeness to his children and by default to Frost has caused tension in his relationship with Miller. "There isn't another person involved but it isn't helped by Jude's devotion to his kids," says the pal.
"He and Sadie have a very friendly relationship for the sake of the kids but they are not getting back together," the pal adds. "It's pretty amazing seeing how calm it is for the kids with them but they are definitely not an item again."
New York-born Miller met Law on the set of Alfie,
the movie in which he seduced her onscreen. Romance flourished offscreen and the pair was engaged on Christmas Day 2004. But just months later, Wright went public with intimate details of the torrid affair she had with the actor while he was filming All The King's Men
After the revelation of the affair, Miller called off their union and Law issued an apology.
After months apart the couple gingerly made another go of it in one of Hollywood's great mysteries of the heart.
"It was one of those can't live with them, can't live without them," an insider told PEOPLE when they first started dating again. Around the same time Miller was linked to new James Bond Daniel Craig but the reports were never substantiated.
Prior to acting, Miller was a model and once appeared nude in a famed Pirelli calendar, but was recently embroiled in controversy in Pittsburgh after insulting the city
in an interview with while filming there. She later apologized to its citizens.