"It has actually been an amicable process that started a few months ago," an insider told Us Weekly. "It wasn't an easy decision, but they decided to stay friends."
Sources went on to say that the couple's "relationship couldn't work with the distance" as they are both focusing on advancing their careers.
The "I Luh Ya Papi" singer is reportedly "doing fine" and is concentrating on "promoting her new album," A.K.A.
Lopez and Smart were first linked as an item in November 2011, just four months after her divorce from singer Marc Anthony.
News of the couple's breakup comes two days after Lopez gave an energetic performance in her native Bronx in the first free concert of the State Farm Neighborhood Sessions.