Lag, latency, weird teleporting or however you wish to call it. We all know what it is and it is very annoying to play against one that is lagging. After you have readed this guide you will be able to easly and effectively block laggers and make your game free and fair once again.

Note
Don't ever lose hope! In the beginning it feels like an endless swarm of blocks, but in the end you will be pleased with the result. It might take a few weeks depending on your amount of play time, but it's worth it!

Extra Note
It appears that the method is not 100% secure, there are a few but rare exploits that can bring you in the same match as someone who is blocked by you. Further investigation is required. I hope I can update this asap.

UPDATE: After months of trying, I have been unable to duplicate this.

If you start blocking laggers it has pros and cons, below you will find a list of it.

The Pros:

• Good bye laggers
  This is the best reason what the pros are for blocking laggers, you simply won't have to play against those filty laggers again. No more random deads by laggers, no more teleporting laggers, they will simply be gone once you blocked almost all of them.
  
  
• Competive gameplay becomes fair
  Lagging can be very easly exploited in many games, in the worst scenario it is used in competive gameplay, if you simply blocked the exploiter/lagger then you won't ever have to play against that person, so you will only play against fair and legit players
  
  
• No increase in queue times
  Blocking players does not increase your queue time at all, it is confirmed that a blocklist lower than 1000 does not increase the queue time. Special thanks to @Rocketier

Neutral:

• Longer queue times??
  I myself, as the author of this guide, have blocked around 400 laggers that played Awesomenauts, I have not experienced any longer queue times with this huge amount of blocked laggers, but maybe as the list increases above 500 there might be a chance that you will experience a little longer queue time.

See: No increase in queue times

The Con:

• About the lagger
  Since you will be blocking any lagger, you might also block some friendly and awesome players in the progress, even the niciest guy on Steam could lag, so take this in consideration before blocking.

Coming Soon (Early June)
Here will be explained how to block a specific player

• Decide when someone is lagging
  I personally block players when their ping is above +300. 300 ping means that the specific player has a delay of 300ms/0,3 seconds. The higher you set your acceptable ping limit, the less players you have to block, but this does not remove the "light" laggers, only the very heavy laggers if you for example only block above +700ms. But do not go below 200, since officialy someone is only lagging if a players' ping is above 250ms.
  
  
• Write down who was blocked for lagging
  Steam does not have a function yet were you can organize your block list, so for now you will need to manually make a list to see who you blocked for what reason. This list can be very usefull if someone askes you to unblock him, but you forgot for whatever reason you blocked the person.
  This is purely optional and not recommended if you don't like to make long lists