The paper presents the basis for the analysis of the optimal selection of the basic technical characteristics of a block transformer with on-load voltage regulation. The block transformer, with its technical characteristics, should optimally match the requirements of the transmission network (which arise from the planning of its future operation) with the available generator capabilities. Due to its complexity and limited space, the consideration of the aforementioned issue is concentrated on the analysis of the optimal selection of the short-circuit voltage value, the nominal transmission ratio, the voltage regulation range (step and number of tap positions) and the type of voltage regulation of the block transformer, while the selection of its remaining technical parameters is not considered here. Furthermore, when considering the selection of the optimal short-circuit voltage value of the block transformer, special attention is paid to the issue of the influence of the short-circuit voltage on the conditions of generator reactive power production and transformer voltage regulation, while other influences are not considered separately. The described issue will be presented on the specific example of the selection of a new block transformer in the Kraljevac HPP.