Voltage stability is a critical factor in reliability assessment of modern power systems. However, the integration of numerous distributed energy sources presents new challenges in maintaining stable voltage for end-users. The distribution transformers with voltage regulation capability play a crucial role within distribution grids by enabling direct adjustment of the output voltage. Among these transformers, On-Load Tap Changers (OLTC) have gained widespread usage due to their simple structure and low cost. However, the mechanical switching operation of OLTCs unavoidably produces transient surge current, impacting downstream equipment. To address this issue, a magneto-controlled transformer for transient surge current limitation is proposed and analyzed in detail. By utilizing low-capacity power electronic devices, these transformers can achieve fast and smooth voltage regulation. This paper focuses on analyzing the current surges generated during voltage regulation by OLTCs and magneto-controlled transformers. The causes of current surges in OLTCs are investigated from the perspective of equivalent circuits. Furthermore, the effective mitigation of current surges with magneto-controlled transformers is explored. Comparative experiments and simulations are performed to evaluate the magnitude of current surges produced by both voltage regulation methods, showcasing the potential application of magneto-controlled transformers in modern power systems.