However, it seems more than a year after they planned to break it off, Mr Fualaau has had second thoughts.
"They're back together," the source told People.
"They've worked through a lot of issues in the past year. They just needed to take a step back and realise what they mean to each other. Of course there are still issues, like all marriages, but they're very much together.
"I know it sounds awkward," the source continued, "but they're figuring it out. It takes a lot of planning to separate after being together for 20 years."
Convicted paedophile Letourneau, now 56, was a married 34-year-old teacher with four kids of her own when she had sex with Mr Fualaau, then one of her 12-year-old, grade six students.
To this day, his wife insists she had no idea what she did was a crime.
He was just 13 when Letourneau had his first baby.
She subsequently pleaded guilty to two counts of felony second-degree rape of a child in 1997 and was sentenced to seven years in prison.
After six months in jail, Letourneau was granted parole on the condition she did not see Mr Fualaau, who was just 1.5 years older than her eldest son.
Less than a month later, police interrupted the couple having sex in a car.
She was then sent back to jail after violating her condition, and ordered to serve out the balance of her sentence. But by then she was already pregnant with Mr Fualaau's second child — her sixth — and gave birth in prison.
Despite all this, Letourneau had said she "did not know" she was committing a crime.
In an interview with Channel 7's Sunday Night in September, the former Seattle primary school teacher was quick to defend her actions — a defence she's held from the beginning of the affair.
"I've said this over and over again. Had I'd known, if anyone knows my personality. Just the idea, this would count as a crime," she said.
"If someone had told me, if anyone had told me, there is a specific law that says this is a crime."
When journalist Matt Doran asked her if she believed she was wrongly imprisoned, she adamantly responded, "absolutely".
Their first child Audrey, now 21, was born after Letourneau's initial arrest, while Georgia, 19, was born behind bars. Both girls were raised by Mr Fualaau's mother up until Letourneau's release.
Letourneau and Mr Fualaau then married in 2005.
He admitted to Sunday Night there were problems within their marriage.
He said he had thought about leaving the relationship but Letourneau said she was still madly in love with her husband, now age 35.
"Anyone that's married knows that it's a labour in love," she said.
In Mary Kay Letourneau: Autobiography, which aired earlier this year, Letourneau said their "relationship" began while they were taking classes at the same community college.
One day after class they went out to eat, Fualaau asked her if he could kiss her, she accepted and that was that.
"Am I sorry he's the father of my children and the man of my life?" Letourneau says in the special, referring to the now 34-year-old Fualaau. "No, I'm not."
According to the documentary's executive producer Brad Abramson, it took some convincing to get Letourneau to take part in the special, but, in the end, she was happy that she did.
"I think she wanted to tell her side of the story for the first time," Abramson says.
"This platform, where she's looking right at the camera in an intimate and personal way, allows her to frame her story … which she was not allowed to do for many years."
