Transtech was established in 1985 when Rautaruukki started to manufacture freight wagons in Otanmäki and Taivalkoski. The company had started the manufacture of engineering products as a subcontractor a couple of years earlier. Valmet´s Tampere rolling stock works, which specialised in the manufacture of passenger railway vehicles and  locomotives, was merged with Transtech in 1991. Rautaruukki sold Taivalkoski works in 1998 to Telatek Oy and the entire Transtech business to Talgo Oy, owned by Patentes Talgo, in June 1999. Patentes Talgo sold the shares of Talgo Oy to a Finnish group of investors on 28 March 2007. The name of the company was then changed back to Transtech Ltd.

In August 2015 Škoda Tranportation Group became the new majority shareholder in Transtech Ltd. The membership in the big international group strengthened significantly Transtech's position the export rolling stock market.