In a comment you mentioned you're the team lead. Maybe you already are, but just in case: stop thinking about it in terms of the individual personal relationship and start thinking about it in terms of the team dynamic. It's unlikely this only affects you, so even if their individual work performance is fine, does their behavior affect other people's performance or happiness at work? If it's affecting others negatively it's your responsibility to protect them and their work output, even if that means finding a new team for this person or documenting a path to letting them go altogether.

I don't envy you. Good luck.