How to end a friendship gracefully

My husband is friends with this guy who is a lying know-it-all, and through default, I have had to become friends with his wife. She is rude and extremely negative. I can't stand being around them. He works out of town most of the time so I can easily avoid him, but I don't know how to tactfully tell the wife that I have no interest in being her friend. We live in a small town and I'll bump into her occasionally, and I can be cordial in those instances, however I don't want to be 'let's hang out ' friends. Aside from telling her the truth (which is way too cruel) what is a gentle way to say 'thanks but no thanks, I'm done with being your friend'?