The invention relates to an online identification system of a transmission line parameter and an identification method thereof. The technical characteristics are that the online identification system includes a data receiving module, a steady state data processing module and a parameter identification module which are connected in sequence; the data receiving module is for receiving PMU measured data issued by a provincial WAMS system front-end processor in real time, and screening out transmission line telemetry data to be identified; the steady state data processing module is for steady state processing of the transmission line telemetry data output by the data receiving module to remove telemetry bad data and transient state data and generate steady data of a 5-minute section; and the parameter identification module is for accurately identifying and calculating a transmission line parameter using the PMU measured data after steady state processing, taking a result obtained by accurate identification and calculation as a final transmission line steady state identification parameter, and verifying the precision of the transmission line online identification parameter. According to the invention, the parameter of the transmission line operation can be accurately identified, and the identification precision and practicability are high.