The beauty queen came out with claims in June that the Miss USA pageant was fixed by Trump and his company Miss Universe Org.
Trump later warned Monnin to retract her accusations or face prosecution for defamation against Trump and the Miss Universe organisation.
Monnin refused, and was hit by a lawsuit seeking undisclosed sums in damages.
The case went to arbitration, and a US District Court Magistrate has now ruled in favour of Trump, awarding the Miss Universe organisation $5 million (£3.08m), reports TMZ.
In a statement, Trump said of the ruling: "We cannot allow a disgruntled contestant to make false and reckless statements which are damaging to the many people who have devoted their hearts and souls to the Miss Universe, Miss USA and Miss Teen USA pageant systems.
"While I feel very badly for Sheena, she did the wrong thing. She was really nasty, and we had no choice. It is an expensive lesson for her."