Blunt was the original choice for the character, who made her first appearance in 2010's Iran Man 2, but it eventually had to go to Scarlett Johansson.
Speaking to Howard Stern, Blunt revealed it was all down to scheduling conflicts - admitting it was a bit of a 'heartbreaker'.
In an interview on The Howard Stern Show, Blunt decided to set the record straight about why she had to step back from Marvel's Cinematic Universe.
She said: "I was contracted to do Gulliver's Travels. I didn't want to do Gulliver's Travels."
Blunt explained how her involvement in the film meant she was contractually obligated to an 'optional picture deal' with 20th Century Fox.
The actor has spoken fondly about her time on the film, having been lucky to have 'a lot of really lovely people who were heaven to work with'.
But she still clearly feels frustrated about the decision she had to make.
She continued: "It was a bit of a heartbreaker for me. I take such pride in the decisions that I make, and they mean so much to me, the films that I do."
Blunt is set to star A Quiet Place 2, the long-awaited sequel to the 2018 horror flick, in which she starred alongside husband John Krasinski.
Blunt, Millicent Simmonds, and Noah Jupe reprise their roles in the new instalment, while Cillian Murphy and Djimon Hounsou will also feature.
The official plot summary reads: "Following the deadly events at home, the Abbott family (Emily Blunt, Millicent Simmonds, Noah Jupe) must now face the terrors of the outside world as they continue their fight for survival in silence.
"Forced to venture into the unknown, they quickly realise that the creatures that hunt by sound are not the only threats that lurk beyond the sand path."
John Krasinski returns to the director's chair, and has also written the follow-up - which was originally scheduled to be released last year.
The film even had its premiere in New York City, but it soon became apparent it would have to be pushed back because of you-know-what.
It has subsequently been rescheduled on numerous occasions, but thankfully it's now set to hit screens later this month on 28 May.
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