In this paper, the phase shifting transformer (PST) is introduced in the Transmission Expansion Planning (TEP) problem considering significant wind power integration. The proposed planning model is formulated as a bilevel program which seeks to determine the optimal strategy for the network reinforcements and the PST locations. The objective of the upper level problem is to minimize the total consumer payment, the investment cost on transmission line and PST. The lower level problems designate the electricity market clearing conditions under different load-wind scenarios. The bilevel model is transformed into a single level mixed integer linear program (MILP) by replacing each lower level problem with its primal-dual formulation. The numerical case studies based on IEEE 24-bus system demonstrate the characteristics of the proposed model. Moreover, the simulation results show that the installation of PST adds flexibility to the TEP and facilitates the integration of wind power.