The couple, who divorced in 2004 but reconciled last September after Barker's near-fatal plane crash, called it quits "after a nasty fight broke out at his house last night and cops were called ... [when] Shanna started freaking out and acting irrational," the source continues.
"Travis confronted Shanna about her having an affair with Gerard Butler while he was in the hospital recovering," the source says. Butler and Moakler were spotted getting cozy at the Hollywood opening of Shin Korean BBQ last October.
Barker "just wants to focus on his music and his children right now. He is done with her drama," the source says.
Barker, 33, and Moakler, 34, are parents to Landon Asher and Alabama Luella. She also has a daughter, Atiana Cecilia, with ex Oscar de la Hoya. They starred in the MTV reality show "Meet the Barkers" in 2006.
"The babies are the most important thing right now," adds the insider. "Shanna cheated on him and then told everyone they were in love again while she was having an affair and he was recovering from the accident."