Dear Manaswita
I can understand your problem, as i am also facing and have faced this earlier.
Managing people is very difficult and complicated, even though they might have good skill and were good worker before. Attitude and Behaviour will change due to professional and personal reasons.
Just find out what is wrong with her, why is she acting like that which was not the case before.
After doing the counselling, motivating, warning, issuing notices, giving less grade in the appraisals, esclating the matter to higher ups, nothing works, just issue a final warning notice and go as per the terms of the appointment order and terminate her.
Build a case file, record all the facts that you considered and measures that you took to retain her, this will help you in justifying your action.
All the very best,
Regards
Ramachandra