Despite talk that their breakup could just be temporary, Rachel McAdams and Michael Sheen had fundamentally "different visions for the future" of their two-year relationship, according to People.
"Rachel wants to settle down and is dreaming of having a family," says a source. "Michael always seemed content with their relationship. Since he already has a daughter [Lily, 14, with ex-girlfriend Kate Beckinsale], he feels no need to have more children. He wants to focus on his career."
McAdams, 34, first fell for Sheen, 45, on the set of the Woody Allen-directed "Midnight in Paris," but the mag says it eventually became apparent that they wanted different things from the romance.
"They tried to work things out, but at the end they just couldn't agree," adds the confidant. "It caused some frustration, and they thought it was better to go separate ways."
As befits the once lovey-dovey pair, "They still have some contact and are friendly."