Ross filed divorce papers Friday at the Los Angeles County Superior Court, asking for spousal support and joint custody of their children Sykla, 7, and Tennyson, 5.
"For the sake of her own happiness, she had to finally go through with the divorce. No matter how hard she tried, she just couldn't forgive Rupert for cheating on her with Kristen. Especially since it was something that caused such public embarrassment," a source told radaronline.com.
"The images of Rupert and Kristen together making out were out there for everyone to see. Liberty just couldn't get those pictures out of her head. She truly tried everything, even counselling, because she was desperate to make it work for the sake of Skyla and Tennyson.
"But after months and months of painful soul searching she decided it was in the best interests to end her misery and make a fresh start," added the source.
Ross and Sanders' marriage has been under strain ever since his fling with Stewart was exposed last summer.
Although Ross, 34, initially kicked the director out of their home after his infidelity was revealed, they began couples therapy in an attempt to save their marriage.