Coupling capacitor voltage transformers(CCVTs) have been used in extra or ultra high voltage systems to obtain the standard low voltage signal for protection and measurement. For fast suppression of the phenomenon of ferroresonance, three winding CCVTs are used instead of two winding CCVTs. A tuning reactor is connected between a capacitor voltage divider and a voltage transformer to reduce the phase angle difference between the primary and secondary voltages in the steady state. Slight distortion of the secondary voltage is generated when no fault occurs. However, when a fault occurs, the secondary voltage of the CCVT has significant errors due to the transient components such as dc offset component and/or high frequency components resulting from the fault. This paper proposes an algorithm for compensating the secondary voltage of a three winding CCVT in the time domain. With the values of the measured secondary voltage of the three winding CCVT, the secondary, tertiary and primary currents and voltages are estimated; then the voltages across the capacitor and the tuning reactor are calculated and then added to the measured voltage. Test results indicate that the algorithm can successfully compensate the distorted secondary voltage of the three winding CCVT irrespective of the fault distance, the fault impedance and the fault inception angle as well as in the steady state.