Vanadium diselenide (VSe2), a member of the transition metal dichalcogenides (TMDs) family, is emerging as a promising two-dimensional (2D) candidate for the electronic and spintronic device with exotic properties including charge density wave and ferromagnetism. The bulk crystal VSe2 exists in a crystallographic form of 1T phase with metallic behavior. In this paper, we report a structural phase transition of multilayer VSe2 from 1T to 2H, which occurs at about 650 K, accompanying a metal-insulator transition. The phase transition is verified by Raman spectra, as different polymorphs have different Raman signals related to different characteristic vibration modes. The electrical characteristics are also studied on VSe2 nanoflakes, as the phase transition occurs along with the metal-semiconductor transition, which is consistent with the electronic band structure calculation. The results of in-situ selected area electron diffraction (SAED) is are accord with our simulated diffraction patterns, which is strong evidence of the structural phase transition. Moreover, we observe that the 2H phase is more thermodynamically stable than the 1T phase at the multilayer level.