Blake Lively Sues Justin Baldoni for Sexual Harassment, Smear Campaign

10:21 AM PT -- In a statement to TMZ, Blake Lively says ...  "I hope that my legal action helps pull back the curtain on these sinister retaliatory tactics to harm people who speak up about misconduct and helps protect others who may be targeted.”

Blake Lively has declared legal war on her former "It Ends with Us" costar/director Justin Baldoni, laying out her allegations of sexual harassment and what she claims is a coordinated effort to destroy her reputation, but Baldoni's team has fired back calling the allegations a false attempt to rehab her reputation.

According to the lawsuit, obtained by TMZ, things got so bad during filming, there was an all-hands-on-deck meeting to address what she claims was a hostile work environment. Ryan Reynolds, Blake's husband, was among the attendees.

The lawsuit lists the demands that were addressed ... she says because of Baldni's conduct. Among those demands -- no more showing nude videos or images of women to Blake, no more mention of Baldoni's alleged previous "pornography addiction," no more discussions about sexual conquests in front of Blake and others, no further mentions of cast and crew's genitalia, no more inquiries about Blake's weight, and no further mention of Blake's dead father.

There's also a demand that there be "no more adding of sex scenes, oral sex or on camera climaxing by BL outside the scope of the script BL approved when signing onto the project."

The suit claims the demands were embraced and approved by the studio, but there was a huge conflict over how it would be marketed. Blake wanted a more upbeat pitch about her character's resilience, as per the marketing plan, whereas Baldoni wanted the focus to be on domestic violence and chose to go off script from the plan.

Lively claims Baldoni and company then engaged in a "social manipulation" campaign to "destroy" Lively's reputation. The suit includes texts from Baldoni's publicist to the studio publicist which says Baldoni "wants to feel like [Ms. Lively] can be buried, and "We can't write we will destroy her."

The suit claims the campaign caused Lively harm to her business and caused her family "severe emotional distress."

Baldoni's lawyer, Bryan Freedman, lashed out at the lawsuit, saying it was designed to "fix her negative reputation," adding the claims are "false, outrageous and intentionally salacious with an intent to publicly hurt."

Freedman goes on to say Lively was a nightmare on set, "threatening to not showing up to set, threatening to not promote the film, ultimately leading to its demise during release."

As we reported, this war has been waged for months ... a war which includes allegations Baldoni asked his trainer how much Lively weighed. She felt it was fat shaming, but we're told Baldoni says he asked because he had a bad back and was trying to protect it.