A variable frequency transformer (VFT) is being considered as a new alternative to the classical back-to-back high voltage direct current (HVDC) link for interconnection of two asynchronous networks. The VFT is a retrospective form of frequency converter using the wound rotor induction machine (WRIM), which converts the constant frequency input into a variable frequency output. The prime objective of VFT is to achieve controlled bidirectional power transfer between the two asynchronous networks. This paper presents a detailed working principle of VFT technology and proposes a new hierarchical control strategy for establishing the VFT connection with two power systems to achieve bidirectional power transfer between them. Also, to restrict the grid fault propagation from one side of the VFT to the other side, a series dynamic braking resistor based fault ride-through (FRT) scheme is proposed. The performance of the VFT during the synchronization process, steady-state, dynamic, and the grid fault conditions is evaluated using the real-time hardware in-loop (HIL) system. The plant is simulated in real time using OPAL-RT real-time simulator while the control algorithm is implemented in digital signal processor to carry out HIL study. All the important results supporting the effectiveness of the proposed control strategy and FRT scheme are discussed.