Conventional fault location methods using voltages and currents of one terminal are not applicable to multi-terminal transmission lines. So far some techniques have been presented to solve fault location problem for multi-terminal transmission lines. In these methods, lumped or distributed frequency domain models of transmission lines have been used. In multi-terminal lines, faulty section should be detected before fault location estimation. In this paper, a method based on time domain model of transmission line is presented to identify the faulty section and to determine the location of faults for three-terminal transmission lines. In the suggested method, samples of voltages and currents at all three terminals are used for calculating the location of the fault. The proposed algorithm is independent of fault resistance, insensitive to load current and fault inception angle. Furthermore, in the method neither any knowledge about source impedance nor the fault type classification is required. Filtering of dc and high frequency components of voltages and currents signals are not necessary. The simulation results, using EMTP/ATP and MATLAB software, confirm the accuracy and precision of the proposed method.