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This paper presents a robust hierarchical control system of distributed generation converters for robust microgrid operation and seamless transfer between grid-connected and isolated modes. The proposed control scheme employs 1) an internal model voltage controller with a variable structure control element to provide means for mitigating fast and dynamic voltage disturbances, such as dynamic voltage disturbance during mode transition and normal operation, and 2) a droop-based power-sharing controller with an active damping feature to mitigate large power-angle swings and oscillations associated with large-signal disturbances (e.g., mode transition and heavy loading conditions). The proposed voltage and power sharing controllers provide high disturbance rejection performance against voltage disturbances and power angle swings, respectively. Accordingly, robust microgrid operation with seamless transfer in the transition mode has been obtained. Comparative experimental results are presented to validate the effectiveness of the proposed control scheme.