A two-level computational structure is developed to design a near-optimal decentralized controller for a multimachine power system. The feedback gains of the decentralized controller are computed within a two-level hierarchical structure, which is based on the division of the control signal for each generating unit into two components. The aim of the first-level controllers is to optimize the performance of the machines totally ignoring the couplings among the generators. At the higher level the gains of the second control components are evaluated to reduce the degradation of the machine performances due to the presence of interactions. A numerical example is given.