A source exclusively told Us Weekly, "Emma and Evan were heading for a split and now are just friends. Evan has moved out. It wasn’t a bad breakup."
The Unfabulous star, 28, and Garrett, who previously dated Kirsten Dunst for four years until parting ways in April 2016, were spotted walking in the Silverlake neighborhood of Los Angeles together.
According to an eyewitness, the Inside Llewyn Davis star, 34, "had his arm around [her] for a bit and then they were holding hands."
Of the couple's new relationship, a second source, "Garrett and Emma have been friends, but this is new, casual, and just a couple of weeks old."
Emma and Evan, 32, first met while filming indie comedy-drama Adult World in 2012 and eventually began dating. They collaborated on American Horror Story for its four seasons.
The former couple sparked breakup speculations in 2013 when the actress was arrested following an altercation with the actor. Emma had hit in Evan's nose leaving it bloody at the time.
Representatives for the pair told media at the time that the fight between them was an "unfortunate incident and misunderstanding."
Emma "was released after questioning" and was "working together [with Peters] to move past it."
Emma and Evan became engaged later that year, but they had briefly taken a break in their relationship in 2015 and 2016.
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