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A two-level hierarchical structure is proposed to improve the stability of multimachine power systems. The solution consists of a local controller for each generator at the first level helped by a multivariable central one at the secondary level. The secondary-level controller uses remote signals from all generators to synthesize decoupling control signals that improve the local controllers' performances. The first-level controllers, on the other hand, use only local signals to dampen local oscillations. A systematic procedure for the design of the wide-area signals based central controller is given. It is based on a reformulation of the multimachine power system model into a suitable and closed form. Our control strategy leads to a robust wide-area controller having two major components: a model-based decoupling nonlinear control and an adaptation module. The nonlinear control parameters are updated so that the controller sensitivity to power systems operating point and structure variation is considerably reduced. The hierarchical structure is used on a large power system and simulation results reveal that the system stability is considerably improved: a power system, unstable under conventional controllers (AVR-PSS/GOVERNOR), is rendered stable when combining the central and local controllers' actions.