Overhead power lines play a key role in the transmission and distribution of electrical power. Traditionally, the operating limits of these overhead lines are fixed and determined through static line rating. These limits are designed under conservative conditions such as high loads and extreme weather scenarios. However, the global energy demand is expected to increase substantially in a few decades. Furthermore, there will be higher levels of penetration of intermittent renewable generation in the power system due to energy transition in the future. In this thesis, a Dynamic Line Rating (DLR) method is developed to enable the determination of the varying operating limits of the overhead lines. It is realized by calculating the maximum allowable current for the line considering the real-time monitored electrical and weather quantities while meeting the requirements for the design and security criteria of the line. This is a more economical and feasible solution to improve the existing power system compared to constructing additional infrastructure. This thesis aims to develop a real-time dynamic line monitoring system by utilizing Phasor Measurement Unit (PMU) data for a 50kV distribution grid. The Real-Time Digital Simulator(RTDS) is used with an interface to MATLAB to realize the DLR model at computational speeds equivalent to real-time operations. A parametric sensitivity analysis is conducted to understand the influence of each parameter in the DLR model and its working. Case studies are conducted by using the DLR model on the 50kVdistribution grid, which showed an increase of 20% on the line ampacity. Lastly, a comparative analysis of the DLR model and the P341 MiCOM DLR relay results are performed by applying RTDS Hardware-in-the-loop (HIL) testing. The results of the DLR model are found to be in accordance with those obtained by the relay which also validates the model. Finally, recommendations and future work are proposed such as DLR implementation for cables using PMU data.