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A decoupled method is proposed to deal with time-domain simulation for power system dynamic analysis. Traditionally, there are two main categories of numerical integration methods: explicit methods and implicit methods. The implicit methods are numerically stable but require more computational time to solve the nonlinear equations, while explicit methods are relatively efficient but may cause a numerical stability problem. This paper proposes a new hybrid method to take advantage of both explicit and implicit methods based on the invariant subspace partition. The original power system equations are decoupled into two parts that correspond to the stiff and nonstiff subspaces. For the stiff invariant subspace, the implicit method is applied to achieve numerical stability, and the explicit method is employed to handle nonstiff invariant subspace for the computational efficiency. As a result, the new hybrid method is both numerically stable and efficient. The approach is demonstrated through New England 39-bus and IEEE 118-bus systems.