Present demagnetization methods for large power system transformers are time consuming and can be dangerous to persons performing demagnetization. The work of this thesis was to develop improved demagnetization methods and to construct an automated instrument that would implement the methods developed. One previously developed method was analyzed for effectiveness. Then, two new methods for demagnetization were developed and also analyzed for effectiveness. An automated test instrument prototype was redesigned to be able to accommodate these methods and to improve the safety of the user. The previously developed method attempts demagnetization based on current flow behavior characteristics. The first new method is a magnetic flux estimation based on saturation time. The second new method is also based on measuring saturation time, modified to account for the variable voltage loss due to wire resistance. The second of the two new methods developed proved to be the most effective for demagnetization and was able to demagnetize a transformer within an error margin of 2%. The instrument designed to perform the demagnetization with this new routine is now in early production stages for an expanded field trial with transformer maintenance teams.