The takeover approach by the Rupert Murdoch owned company was made last month, it was revealed.
Twenty-first Century Fox confirmed in a statement on Wednesday that its offer for Time Warner had been rejected.
It added it was not currently in talks with Time Warner about pursuing the deal further.
“21st Century Fox can confirm that we made a formal proposal to Time Warner last month to combine the two companies,” the company said.
“The Time Warner board of directors declined to pursue our proposal. We are not currently in any discussions with Time Warner.”
Twenty-first Century Fox, owns movie studio 20th Century Fox and cable news channel Fox News.
According to the New York Times, Fox offered to sell Time Warner-owned CNN as part of the takeover deal proposal for its rival in order to clear any objections US regulators might have had to the deal.
A statement released by Time Warner said after lengthy discussions it had decided it was not in its best interests or those of its shareholders to accept the proposal or to pursue any further discussions with Fox.
Time Warner’s share price jumped some 16.35% higher in the first 20 minutes of trade on the New Stock Exchange to $82.62 per share.