She is a gossip.
It's very hard to stop gossips because they get strong reinforcement from their listeners. It's no good trying to battle her through counter-gossip. She must be confronted, and you must confront her. That may be painful to you, but there is nothing else that works.
Begin by saying how much it hurts you - accept no excuses from her. You feel hurt, and it doesn't matter to you what she thinks about it or how it feels to her and how she thinks others feel. Tell her she must stop. No threats, no if you don't I'll . . . , Just stop talking to her, and tell those listening that you won't participate in any group that does not respect you, and leave. You will soon find which people are worth your friendship and which aren't.
Nobody needs to befriend a vicious gossip. Eventually, nobody will.