Abstract A novel approach to the design of decentralized controllers for large-scale systems by dynamic/static output state feedback is presented. A new formulation of the interaction which introduces some degrees of freedom into the design procedure is offered. Sufficient conditions for exponential stability with desirable rate of decay and maximal robustness to unstructured uncertainties in the controller and plant parameters are established. The derived conditions are generic, applicable to nonsquare and nonminimum-phase systems, and independent of the number of system states, inputs and outputs. Based on minimal sensitivity design of isolated subsystems, an analytical method for the satisfaction of the aforementioned sufficient conditions is presented. To this end, through eigenstructure assignment, compact-form sufficient conditions for minimal sensitivity are derived. Illustrative examples are presented to demonstrate the effectiveness of the proposed methodology. Genetic algorithm is employed in th...