The stability of wide-area power system with signal transmission delay is investigated in this paper. A non-linear time-delay Hamiltonian model of power system is constructed. Based on the proposed model, the Hamiltonian functional method is used to derive a delay-dependent steady stability criterion in term of matrix inequalities by constructing suitable Lyapunov–Krasovskii functional. Then the wide-area damping controller (WADC) for the power system is designed based on the delay-dependent sufficient conditions. The constant time-delay introduced by the transmission of the remote signals is investigated. The relationship between the parameters of WADC and the delay margin has been investigated. It is used to guide the design of WADC and achieve a trade-off between the damping performance and delay margin. Four-generator eleven-bus power system is used to illustrate delay effect on inter-area mode damping. The performance of the proposed controller is verified by the results of simulation in time-domain, and it is proved that the method proposed in this paper is effective.