All perfect praise be to Allah, The Lord of the Worlds. I testify that there is none worthy of worship except Allah, and that Muhammad is His slave and Messenger.
Your sister having a boyfriend is a relationship that Islam forbids as Allah the Almighty says in the Quran (what means): {...[They should be] chaste, neither [of] those who commit unlawful intercourse randomly nor those who take [secret] lovers...} [Quran 4:25]
It is strange for her to justify this friendship by claiming that this friend treats her better than her previous husband. What happiness is there in doing such a thing that incurs the wrath of Allah? And the matter is worse if she lets him have sexual relationship with her.
It is obligatory to advise and remind her of Allah, and this should be done gently and kindly. The advice should come from someone whose words she respects, if she heeds the advice, that is good, but if not, then distancing yourself from her and cutting off communication might be necessary. This is done with the intention of deterring her and preventing her from engaging in such reprehensible actions. If this proves to be effective, then it is worthwhile; otherwise, cutting off communication with might still be necessary.
However, it is crucial to express disapproval in your heart and not show satisfaction with her actions. Children should not be allowed to be in her company if there is a fear that her influence could lead them astray. If there is no such fear, then there is no harm in them visiting her.
Allah knows best.