A method 200 for protecting a three-winding transformer 126 of a wind turbine 100 includes estimating 202, via a controller 176, an electrical condition of the primary winding 128 of the transformer 126. The method 200 also includes determining 204, via the controller 176, an electrical condition limit of the primary winding 128. The method 200 also includes comparing 206, via the controller 176, the estimated electrical condition to the electrical condition limit. Further, the method 200 includes implementing 210 a corrective action for the wind turbine 100 if the estimated electrical condition exceeds the electrical condition limit so as to reduce the electrical condition within safe limits.