This article presents a new device named flexible step-voltage regulator (FSVR) based on a multiwinding transformer for unbalanced distribution networks. While the traditional step-voltage regulator (SVR) can be used to control the voltage magnitude only, the proposed device can be used to control both voltage magnitude and phase angle for each phase independently. This allows greater flexibility during voltage control in unbalanced distribution networks. A mathematical model of the FSVR is derived for implementation in unbalanced power flow analysis. Simulation studies for IEEE 13 bus and IEEE 34 bus test networks demonstrate the effectiveness of the FSVR over the traditional SVR in reducing real power losses and voltage imbalance in the distribution network. A scaled-down model of the FSVR is designed in the lab to demonstrate the proof of concept.