For the low frequency oscillation problem of wide area interconnected power system, by taking the time delay of wide area control loop into account, this paper designed a decentralized damping controller. Firstly, a qualitative analysis of time delay in wide area control loop was finished, and then on the basis of the linear interconnected power system model, the controller is designed under the time delay dependent sufficient condition of stability. Finally, with the fixed and random time delay, the simulation results of a four-machine two-area system verified the designed controller can effectively improve the system damping and restrain the low frequency oscillation and enhance the dynamic stability of system.