The ex-Downing Street chief, who penned the Tories disastrous 2017 election manifesto, was beaten by the chair of West Midlands Conservatives Suzanne Webb in a members vote last night.
It comes after Margot James, the constituency’s MP since 2010, stood down due to a lack of support from her local party over her stance on Brexit.
It is the second time in a week that Mr Timothy has been rejected after he failed in a bid in the West Midlands seat of Meridan on Tuesday.
Ms Webb has represented Castle Vale on Birmingham Council since 2018 and describes herself as a "proud Brexiter".
She said she was looking forward to meeting people in the area and sharing her "positive vision" and how she intends to be a "local champion" who campaigns on issues such as saving the green belt, travellers’ sites and the regeneration of Lye.
Ms Webb also paid tribute to her predecessor Ms James, who decided not to stand for re-election despite having the whip reinstated by Boris Johnson.
"Margot has been an excellent MP for Stourbridge, I wish her well for the future and thank her for all that she has done to help make this area an even better place to live work and raise a family. I know she will be missed," Ms Webb said.
She added that she wants to see Brexit delivered with the Prime Minister's "great new deal".
Ms Webb spent more than 25 years in a senior role for a global logistics firm. She is a green belt campaigner and once helped to stop a 6,000-housing development being built on green belt land in Birmingham.
She got the nod from members in the first round of voting, beating Mr Timothy and former Wolverhampton councillor Arun Photay, who also failed in a recent bid for candidacy in Dudley North.