In order to eliminate the harm to the modern power system, in this paper, the design of the dynamic output feedback controller of the power system with time delay is researched. timedelay. Firstly, a specified transformation of the closedloop system with free matrices and correspondent construction of LyapunovKrasovskii functional are introduced, by which the stability criterion of power system with timedelay. Then, the parameterization of controller is used to establish the design condition in terms of LMI with respect to all parameters of controller and LyapunovKrasovskii function. The conservatism caused by nonconvexity in the existent results is relaxed by using the methods. Finally, the simulation results show that the dynamic output controller has a certain timedelay insensitive and improve the stability of power system.