The efficient placement of Phasor Measurement Units (PMUs) is crucial to minimize their number while ensuring full power system observability. A power system is deemed observable when the voltage at every bus is known. This study proposes a topology transformation approach that combines a Zero-Injection Bus (ZIB) with one of its neighboring buses to achieve optimal PMU placement. The choice of the neighboring bus for combination with the ZIB significantly influences the outcome of the merging process. To identify the optimal candidate bus for merging with the ZIB, the proposed approach utilizes three selection principles aimed at determining the minimal number of PMUs necessary for complete system observability. This study also examines the scenario of power flow measurements, formulating the problem using Integer Linear Programming (ILP). The effectiveness of the proposed method is demonstrated through simulations conducted in MATLAB on various IEEE Bus systems, with a detailed explanation provided using the IEEE 14-Bus system. Comparative analysis reveals that the number of PMUs obtained with the suggested method is competitive with existing techniques. Furthermore, this study includes a comparison between the IEEE 30-Bus and IEEE 14-Bus systems by inducing faults at specific buses. This is done to verify whether PMUs placed at optimal locations ensure complete coverage of all buses in both systems. The comparison also extends to evaluating the cost implications of placing PMUs solely at these optimal locations.