Coherency detection in power system is vital step for controlled‐islanding. Model‐based slow‐coherency method is the traditional method of detecting coherent areas, which suffers from computational burdens. With the implementation of a wide‐area measurement system (WAMS) in power systems, coherent areas can be detected early after a disturbance that helps to ensure quick separation or remedial action. In this study, a novel Synchrophasor‐based coherency identification method has been proposed with bus voltage angle measurement. A new algorithm is proposed based on the first and second derivatives of the bus voltage phase angle using hierarchical clustering method for coherency detection. The proposed approach leverages hierarchical clustering method and the dynamics reflected in the bus voltage phase angle behavior to achieve automatic and accurate coherency identification. Real time simulation results demonstrate the ability of the proposed algorithm to detect the coherency with three consecutive PMU data from all the system buses and showcase coherent area boundaries. Case studies show robustness of the proposed method and is least affected by the latency in communication network compared to conventional methods. The proposed algorithm has been mathematically formulated and evaluated with different benchmark systems in OPAL‐RT real‐time simulation environment with HYPERSIM platform.