The president has failed to block Manhattan District Attorney Cyrus Vance's request for eight years of his tax returns.
The prosecutor is probing allegations hush money was paid to two women, porn star Stormey Daniels and former Playboy model Karen McDougal, ahead of the 2016 US Election.
US District Judge Victor Marrero in Manhattan today decided to abstain from resolving the dispute and dismissed Mr Trump's lawsuit, citing legal precedents.
Mr Vance had filed a subpoena for the tax returns and other records from Mr Trump's accounting firm Mazars.
Mr Trump's claim that in his view a sitting President should be completely immune from criminal processes so he can carry out the role is described as "extraordinary" in today's decision.
The judge wrote that a president could not expect to be shielded from any judicial processes, whether they concerned his presidential or personal activities.
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