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Islanding detection methods can be divided into communication-based and local detection-based methods. Proposed local passive detection methods have traditionally been dependent from the distributed generation unit type. A large non-detection zone near a power balance situation and unwanted distributed generation tripping due to other network events have also been major challenges with traditional, passive local islanding detection methods. In this paper, a new multi-criteria-based islanding detection algorithm is presented. This new islanding detection algorithm is able, based on local measurements, to detect very fast and selectively islanding situations in a perfect power balance without non-detection zone. The new multi-criteria algorithm measures the changing natural response of the network due to islanding based on voltage unbalance and voltage total harmonic distortion parameters as well as intelligently utilizes the available fault detection information. With the new islanding detection algorithm, no nuisance tripping is likely to occur due to other network events or disturbances and it is not dependent on the distributed generation unit type.