Adansmama has great advice; just tell her the arrangement isn't working out for you, and give her a date by which she'll need to find other arrangements. A friendly and kind voice help the bad news go down. Excuses or reasons are not necessary, and will usually make a decision seem weaker rather than stronger.
So don't tell her her children are a problem; she's not there to make them observe your rules during the day. She can't make them be respectful from a distance. If she presses for more details, say no more than the kids aren't getting along well, and you don't need the stress. Period.
She may not like it, but you are not obligated to take care of her feelings.
(It sounds like you've been very generous with her, and I hope she'll be grateful for your free services up till now. But in my experience, you can't necessarily count on that. If she seems miffed or unfriendly, just hold in your heart that you did a good deed for someone, and that generosity was a gift to her, to her children, and to yourself. Respect yourself even if she tries to guilt you. A gift doesn't have to be acknowledged in order for it to have real value.)