The model – and the world – was left stunned when two years ago it emerged Kristen had conducted an affair with her married Snow White and the Huntsman director Rupert.
Liberty – who has two children with Rupert – divorced him. She is now dating music mogul Jimmy Iovine.
But, speaking in the new issue of Harper's Bazaar UK, the model and fashion designer says she's now moved on and harbours no ill will towards anyone involved
"It's amazing what two years does. Today, I feel happier than I've ever felt and I'm in such a great place. All of us are: my kids are great, Rupert's amazing, we have all moved on and everyone is doing really well."
She added: "People need to learn to forgive. I have no problem with anyone involved. I'm completely compassionate, I really am. No life is perfect, we all have our problems and issues and I believe that it's good to be true to who you are."
Liberty added that she and Rupert had been together since she was a teenager. He was her first boyfriend. "I always used to say we were more like brother and sister anyway. We'd been together for so long, we weren't really evolving together as a couple so much."
She said that Rupert remains a big part of her life and now he feels like "another sibling".
The cheating scandal broke in summer 2012 while Liberty was still married to Rupert and Kristen was in a long-time relationship with her Twilight co-star Robert Pattinson.
After pictures of Kristen and Rupert kissing were published by a magazine, the normally fiercely private Kristen had to issue a statement apologising to fans, friends and family - including Rob.
"I'm deeply sorry for the hurt and embarrassment I've caused to those close to me and everyone this has affected," she said.
"This momentary indiscretion has jeopardised the most important thing in my life, the person I love and respect the most, Rob. I love him, I love him, I'm so sorry."
Kristen and Rob have since broken up.
Liberty, meanwhile, is currently in London promoting her fashion collaboration with Genetic x. Last night, a star-studded dinner was thrown in her honour at Annabel's private members club with guests including Kim Kardashian West.
Reveal is now on Google Plus! Join us here for the latest pictures, fashion and celebrity news!