The news, confirmed by sources to TMZ, follows Lively's accusations of sexual harassment and claims that Baldoni attempted to damage her reputation.
In her lawsuit, Lively alleges that the production of their movie It Ends With Us became so toxic that the team had to pause filming for a meeting to address inappropriate behavior.
Lively claims Baldoni showed her a nude photo, spoke about a past "pornography addiction," discussed sexual exploits, and made comments about her weight. She also alleges that Baldoni worked with two crisis PR consultants, Melissa Nathan and Jennifer Abel, to harm her reputation, citing messages obtained through a subpoena.
Justin Baldoni’s lawyer, Bryan Freedman, has denied the claims, calling them "false, outrageous, and intentionally damaging." Freedman suggested that Lively filed the lawsuit to repair her own public image.
WME, which reportedly also represents Lively, has not provided a statement on why it severed ties with Baldoni.
As of now, Baldoni has not responded to being dropped by the agency.