The former barrister sought at least $800,000 in damages from the state over claims she was groomed by police to become a human source in late 2005.
Also known as "Lawyer X", she claimed police exploited her vulnerabilities and distress due to close ties to gangland figures, including Tony Mokbel, by offering her protection, support and promises to hide her identity in exchange for information on her gangland clients.
But her cover was blown in March 2019 when she was exposed as "Informer 3838" and "Lawyer X".
Justice Melinda Richards on Friday dismissed Ms Gobbo's lawsuit as she handed down judgment in Victoria's Supreme Court.
Of the 10 police officers being sued, she said only four owed Ms Gobbo and her children a duty of care.
But once Ms Gobbo decided to become an informer, "exposure was an inherent risk," the judge said.
"So the state can't be held liable.Therefore it is unnecessary to assess damages," she said.
Justice Richards ruled Ms Gobbo "was not induced" to become a police informer and was a "willing recruit".
"And so the premise of the alleged duty of care did not exist," she said.
Ms Gobbo's legal representative Angela Sdrinis said none of the officers who benefited from her clients' assistance were criticised in the judgment or had action taken against them.
"Today's judgment means that Ms Gobbo, and her children, will continue to be punished for her actions whilst others who were involved are able to get on with their lives without consequence," Ms Sdrinis said in a statement.
The former barrister issued a warning to people thinking of becoming informers: "you will not be protected".
Ms Gobbo, who has also been ordered to pay the costs for the state, will consider an appeal with her legal team.
The former barrister was registered three times as a police informer in the 1990s to mid-2000s, when she gave handlers information about underworld figures.
During the judge-alone trial, her lawyers said their client suffered psychological injury since her double identity was exposed.
She was forced into the witness-protection program with her two children and her depression worsened as they moved overseas for their safety.
The state has fought each of Ms Gobbo's claims, arguing she voluntarily became an informer and she could have left the role at any time.
During the trial, Ms Gobbo gave evidence by video live stream from a secret location with her image hidden inside the court to protect her new identity.
Ms Gobbo signed the bar roll at age 25, becoming the youngest woman in the state to do so, and quickly found herself representing gangland clients, including the Mokbel family and Carl Williams' clan.
A royal commission found her position as both an informer and a barrister could have affected more than 1000 convictions.
Former clients Mokbel, Faruk Orman and Zlate Cvetanovski have successfully had convictions overturned since her role was uncovered in March 2019.
In 2010, Ms Gobbo sued Victoria Police, claiming they failed to protect her as a witness and settled out of court for almost $3 million.
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