Pulis took the case to court after a Premier League Managers' Arbitration Tribunal ruled that the 58-year-old deceived Palace into paying him the bonus when he left the club in 2014.
A High Court judge has now upheld the decision, which has been explained in a document published by Sir Michael Burton.
According BBC Sport, the ruling claimed that Pulis's contract with Palace included a clause that would award him a £2m bonus if he kept the club in the Premier League by the end of the 2013-14 season and remained as manager until August 31, 2014.
Pulis did retain Palace's top-flight status, but he left Selhurst Park on August 14 - one day after asking to receive the £2m bonus earlier than agreed.
The arbitration tribunal rejected Pulis's claims that he "urgently needed the money" to buy land for his children, instead accusing the football coach of giving a 'false impression'.
The tribunal said: "There was in truth no pressing need for the money at all, since at no time was there a plot of land on the market which Mr Pulis was remotely close to purchasing."
Pulis now works as West Brom head coach - a job that he took on last year.