Katherine O'Donnell worked as a night editor on the paper's Scottish edition but was made redundant after the office in Scotland was closed and she turned down an offer to relocate to London.
After her redundancy, Ms O'Donnell sued her former employer for discrimination, harassment, victimisation and unfair dismissal, and claimed there was a "toxic environment for trans people" at the newspaper.
But after 19 days of hearings at an employment tribunal in Edinburgh, judge Jane Porter cleared The Times of all the allegations against it.
In her judgment, Ms Porter concluded Ms O'Donnell's redundancy was not as a result of her status as a transgender woman - a protected status in law.Ms O'Donnell had claimed there was a culture of discrimination at the Times, calling it a "boys club", but the tribunal found there was "insufficient evidence of such a culture" and no evidence of dishonesty.
Following the judgment, a spokeswoman for The Times said: "We are pleased this judgment dismisses all the claims made by the claimant and confirms that The Times took reasonable and appropriate decisions and did not show any anti-transgender bias towards its staff."
Ms O'Donnell said she was disappointed at the decision and is considering an appeal.
Writing on Twitter, she said: "I am disappointed with the judgement of the tribunal in my discrimination and unfair dismissal case against Times Newspapers Ltd.
"Working with my barrister, we are considering an appeal.
"To my witnesses and all who have supported me over the past two years, thank you."
During the hearing, Ms O'Donnell said she overheard the Times' then-deputy editor and deputy head of news refer to murdered transgender women in India as "a lifestyle choice" - a comment Ms O'Donnell said made her vomit involuntarily.
However, she did not report it until four-and-a-half years after it is claimed to have happened and the judge ruled this apparent incident "did not take place as alleged" by the claimant.
The judgment added: "The tribunal found it incredible that an incident such as this would not have been the cause of a complaint, let alone a grievance, to any member of the management staff at the relevant time."
Editor of the Times John Witherow was called to give evidence at the tribunal and, during cross-examination by barrister Robin White, was shown dozens of articles and columns which allegedly showed anti-trans bias.
Mr Witherow rejected the claims, describing the paper as "supportive" towards trans issues, and he added: "The paper produces so much copy that to highlight a few articles can be misleading about what we do."