A current transformer is an instrumentation transformer which steps down the AC current to a safe level (usually 1 Amps or 5 Amps full scale) so that relays and measurement devices can easily deal with current.
Our electrical power system carries heavy currents of about hundreds of amps at very high voltages. Electrical measurement devices can’t directly deal with such a high amount of current and voltage. Therefore instead of directly connecting the measurement devices, a current transformer is used instead which brings down the current to a safe level for metering devices.
The figure below displays a current transformer having a line conductor passing through it. The yellow cables are output terminals which connect to an ammeter or any other measurement device for passing signals.
Current transformers are available in variety of types and designs. The figure below displays a current transformer installed on 500 kV substation. The CT is located inside a box that is placed over an insulator for insulation purposes: