This article presents a decentralized optimal controller design technique for the frequency and power control of a coupled wind turbine and diesel generator. The decentralized controller consists of two proportional‐integral (PI)‐lead controllers which are designed and optimized simultaneously using a quasi‐Newton based optimization technique, namely, Davidon–Fletcher–Powell algorithm. The optimal PI‐lead controllers are designed in such a way that there are no communication links between them. Simulation results show the superior performance of the proposed controller with a lower order structure compared to the benchmark decentralized linear‐quadratic Gaussian integral controllers of orders 4 and 11. It is also shown that the proposed controller demonstrates an effective performance in damping the disturbances from load and wind power, as well as a robust performance against the parameter changes of the power system.