A chemical co-precipitation strategy was employed to synthesize a series of (Gd_0.95−xLu_xEu_0.05)₃Al₅O₁₂ (x = 0.1−0.95) powder phosphors, followed by vacuum sintering to achieve transparent garnet ceramic phosphors. The density functional theory indicated Lu₃Al₅O₁₂ was formed in priority compared with Gd₃Al₅O₁₂ during solid-phase reaction. Upon high-temperature sintering, the Lu³⁺ substitution for Gd³⁺ suppressed point mass diffusion leading to a smaller grain size. The in-line transmittances of bulk specimens with x = 0.1, 0.3, 0.5, 0.7, and 0.95 nm were ~83.5%, 80.1%, 68.8%, 73.7%, and 82.2% at 710 nm (Eu³⁺ emission center), respectively, among which the sample of x = 0.1 exhibited the optical grade with near-zero optical loss in agreement with the defect-free single crystal (~100% of the theoretical transmittance). The resulting particle and ceramic materials both presented characteristic Eu³⁺ emission arising from ⁵D₀→⁷F_J (J = 1−4) transition, where the dominant far-red emission at ~710 nm arising from ⁵D₀→⁷F₄ transition overlapped with the absorption of phytochrome (P_FR). The photoluminescence excitation and photoluminescence intensities of (Gd_0.95−xLu_xEu_0.05)₃Al₅O₁₂ powders and ceramics generally increased at a higher Gd³⁺/Lu³⁺ ratio. Lu³⁺ dopants delayed the fluorescence lifetime while the bulk samples had shorter lifetime compared to the particle counterparts. The transparent (Gd_0.85Lu_0.1Eu_0.05)₃Al₅O₁₂ ceramic phosphor exhibited good thermal stability with a high thermal quenching temperature above 533 K. The designed ceramic phosphor-converted light-emitting diode had a saturation injection current of 435 mA and a current-dependent color rendering index. More importantly, our report marked the developmental stage of transparent ceramic materials towards zero optical loss.