BRT-lane-sharing, which allows regular buses to operate on Bus Rapid Transit (BRT) lanes without disrupting scheduled BRT operations, has gained prominence. It is helpful to increase the utilization of BRT lanes and enhance the efficiency of the bus transit system. However, the current approaches for designing bus transit networks and setting frequencies do not incorporate BRT-lane-sharing, thereby neglecting its potential benefits, including improved speeds, easier transfers, and cost savings. This paper proposes a pioneering study for the Bus Transit Network Design and Frequency Setting (BTNDFS) problem incorporating BRT-lane-sharing. A novel road network description is presented, specifically tailored to accommodate BRT-lane-sharing through the introduction of BRT nodes and BRT-lane arcs. Furthermore, a bi-level model is built for the BTNDFS problem incorporating BRT-lane-sharing. To solve this model, a Priority-Based Genetic Algorithm (PBGA) is proposed, in which a priority-based chromosome is defined, whilst priority-based crossover and mutation operators are devised. Experimental results on the standard Mandl’s benchmark instances indicate that the PBGA outperforms other metaheuristic approaches, with outcomes closely approximating optimal solutions. Further experiments are carried out on a real-world network featuring BRT-lane-sharing in the city of Linyi. The results show that the proposed model and the PBGA can reduce costs for passengers and operators, while simultaneously increasing the utilization of BRT lanes.