The effect you're looking for is called "Depth of Field" I believe. Disable that in the graphics settings and the blurring will stop. What this effect does is some kind of simulated camera lense where the focus is where your mouse cursor is. So if your cursor is looking at the distance, the near field gets blurry. If you are looking at the near field, then the distance gets blurry.

At first I wasn't a big fan of this effect, and normally anything "cinematic" is a no in my books (especially chromatic aberration), but somehow this effect grew on me. Its pretty nice when you know what it does and how to focus the camera.