<p>The rapid urbanization and increasing residential energy demand of smart cities pose significant challenges to achieving the sustainable development goals, particularly those related to clean energy and sustainable energy communities. This paper proposes a framework designed for a self-sustainable transactive energy community within a smart city, aiming to enhance the community’s self-sufficiency and self-consumption. The proposed framework in the transactive energy community leverages advanced technologies, including distributed renewable energy resources and peer-to-peer energy trading, to optimize local energy generation and usage. By fostering localized peer-to-peer energy trading and reducing dependence on centralized grids, the system minimizes energy losses, enhances grid stability, and supports decarbonization efforts. This paper proposes auction-theoretic pricing strategies that incorporate double auction and average pricing mechanisms to determine market-clearing prices. A comparative analysis of proposed auction-theoretic approaches with existing approaches, such as the peer-to-grid, supply-to-demand ratio, mid-market rate, and bill-sharing, reveals that the auction-theoretic mechanism outperforms the existing mechanisms in terms of improving performance indices, namely self-sufficiency and self-consumption of the energy community. The simulation results reveal that the average pricing mechanism improved self-consumption by 38% and self-sufficiency by 35% compared to the traditional peer-to-grid mechanism. Additionally, the double auction pricing mechanism improved self-consumption by 40% and self-sufficiency by 38% compared to the traditional peer-to-grid mechanism.</p>