This paper examines the use of an output feedback variable structure controller with a nonlinear sliding surface for a class of SISO nonlinear systems in the presence of matched disturbances. With only the measurable system output, the discontinuous observer reconstructs the system states and ensures that the estimation errors exponentially approach zero. Using the estimation states, the proposed nonlinear sliding surface with variable damping ratio can simultaneously achieve low overshoot and short settling time. Then the passivity-based controller including a discontinuous term can guarantee that the closed-loop system asymptotically converges to the sliding surface. Compared with other sliding mode controllers, the proposed passivity-based control scheme has better transient performance and effectively reduces the control gain. Finally, simulation results demonstrate the validity of the proposed method.