Compared to the wind farm itself, wind farm transformers are often oversized with regard to their capacity and lifetime. One of the reasons is that power transformers are normally sized at planning stage according to their rated power limits instead of their thermal limits. The thermal limits are usually considered only in operation. In this paper, a new method is proposed to take thermal limits into account and size the wind farm transformer at planning stage based on the expected life of the transformer insulation. An analytical model of wind turbine wakes loss is combined with the transformer thermal model to calculate the expected lifetime of the transformer insulation more accurately. Different from the previous approaches, the proposed method considers both the wake effect and the time-varying ambient temperature. Results show that compared to using the constant temperature and predicted power output without wake loss consideration, the expected lifetime of transformer insulation evaluated after involving these two factors is closer to the result evaluated based on the measured wind power.