Stress shielding is one of the major concerns for total ankle replacement implants nowadays, because it is responsible for implant‐induced bone resorption. The bone resorption contributes to the aseptic loosening and failure of ankle implants in later stages. To reduce the stress shielding, improvements can be made in the implant material by decreasing the elastic mismatch between the implant and the tibia bone. This study proposes a new functionally graded material (FGM) based tibial implant for minimizing the problem of stress shielding. Three‐dimensional finite element (FE) models of the intact tibia and the implanted tibiae were created to study the influence of material gradation law and volume fraction index on stress shielding and implant‐bone micromotion. Different implant materials were considered that is, cobalt–chromium, titanium (Ti), and FGM with Ti at the bottom and hydroxyapatite (HA) at the top. The FE models of FGM implants were generated by using different volume fractions and the rule of mixtures. The rule of mixtures was used to calculate the FGM properties based on the local volume fraction. The volume fraction was defined by using exponential, power, and sigmoid laws. For the power and sigmoid law varying volume fraction indices (0.1, 0.2, 0.5, 1, 2, and 5) were considered. The geometry resembling STAR® ankle system tibial implant was considered for the present study. The results indicate that FGMs lower stress shielding but also marginally increase implant‐bone micromotion; however, the values were within the acceptable limit for bone ingrowth. It is observed that the material gradation law and volume fraction index influence the performance of FGM tibial implants. The tibial implant composed of FGM using power law with a volume fraction index of 0.1 was the preferred option because it showed the least stress shielding.