Controlled islanding has been proposed as a last resort action to stop blackouts from happening when all standard methods have failed. Successful controlled islanding has to deal with three important issues: when, and where to island, and the evaluation of the dynamic stability in each island after islanding. This paper provides a framework for preventing wide-area blackouts using wide area measurement systems (WAMS), which consists of three stages to execute a successful islanding strategy. Normally, power system collapses and blackouts occur shortly after a cascading outage stage. Using such circumstances, an adapted single machine equivalent (SIME) method was used online to determine transient stability before blackout was imminent, and was then employed to determine when to island based on transient instability. In addition, SIME was adopted to assess the dynamic stability in each island after islanding, and to confirm that the chosen candidate island cutsets were stable before controlled islanding was undertaken. To decide where to island, all possible islanding cutsets were provided using the power flow (PF) tracing method. SIME helped to find the best candidate islanding cutset with the minimal PF imbalance, which is also a transiently stable islanding strategy. In case no possible island cutset existed, corresponding corrective actions such as load shedding and critical generator tripping, were performed in each formed island. Finally, an IEEE 39-bus power system with 10 units was employed to test this framework for a three-stage controlled islanding strategy to prevent imminent blackouts.