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A novel control strategy based on optimal control theory is developed in this paper and applied to an induction generator based variable speed wind turbine. The proposed approach modifies a classical LQR approach by augmenting the system with first order filters and integrators to ensure perfect decoupling between the controlled variables while minimizing the control effort. Application of the proposed approach to an induction generator based variable speed wind turbine has led to optimum operations and a reduced mechanical stress in the turbine drive train during wind gusts. Simplicity of the overall scheme, minimization of the required energy and stabilization and excellent tracking performance are the main positive features of the proposed approach.