There are conditions that can be unbalanced three phase currents in a large generator by untransposed lines, unbalanced loads, unsymmetrical faults, and open phases. The unbalanced conditions can producing negative sequence components of current that induce two times frequence current in the surface of the rotor, the retaining rings, the slot wedges in the field windings. These rotor currents make the rotor rapidly overheat, so the rotor can cause substantial damage in a very short time. This paper presents the digital negative sequence relay algorithm for unbalanced protection in a generator. The proposed algorithm was tested by using collected current signals on PSCAD/EMTDC considering a hydro turbine based generator control system. It can be seen that the proposed relaying by negative sequence current is useful for detection of unbalanced state of large generator.