The Avenger role ultimately went to Scarlett Johansson who first appeared in 2010's Iron Man 2 and will star in the standalone Black Widow movie, which is set for release July.
Blunt, 38, said no to the superhero role because she was already contracted to star opposite Jack Black in 20th Century Fox's Gulliver's Travels, a film she "didn't want to do".
Speaking on The Howard Stern Show, she said: “It was a bit of a heartbreaker for me, because I take such pride in the decisions that I make and it, they mean so much to me, the films that I do do. So that was tough.”
She added: “And they kind of have a bit of a hold over you. So there were other movies that I would want to do and I’d say, ‘But I really want to do this movie about young Victoria.’
“And so, at some point, I think it just became evident that I needed to get rid of this optional picture deal because it was going to just hang over me for a long time and I didn’t want that.
“And ultimately, as hard as it was, I don’t think anyone expected for the hand to be forced, you hope that it isn’t.”
The Devil Wears Prada star went on to say she is "never left with a feeling of regret" after turning down a project.
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Blunt also shared that she made an effort with her performance on Gulliver's Travels as she worked with "a lot of lovely people" and she had "a really good time".
She said: "I had a laugh with all of them, but it irked my heart for it to have happened in the first place, but I will always try to make the best of any situation for sure.”
With additional reporting by PA.
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