The incorporation of converter-based generating sources in utility-scale microgrids causes frequency instability and low-frequency oscillations (LFOs), which is also a reason for degeneration in system stability. Damping frequency control is an essential part of alternating current (AC) microgrid system operation and control. Sudden changes in load, variations in renewable power outputs due to changes in solar insolation or wind speed, and so on factors cause the system frequency to deviate from the nominal value. Therefore, the role of a frequency controller is to maintain the dynamic stability in an AC microgrid by retaining the system frequency at the nominal value. Again, AC microgrids with high renewable power penetration face even more difficulty in maintaining frequency stability because of their poor inertial response. The research presented here proposes a novel approach for grid-connected AC microgrid oscillation damping and frequency control that simultaneously takes into consideration time delay and noise. To improve the frequency response and dampen LFOs by providing the voltage and frequency within the specified range, a coordinated technique-based control approach is adopted. In the developed hybrid control, the frequency controller relies on active power modulation, while the power oscillation damping controller is dependent on reactive power modulation. To improve stability and reduce communication consequences such as noise and signal latency (time delay), the developed power oscillation damping controller and frequency controller are coordinated along with the robust linear quadratic Gaussian controller. The comparative investigation of the effectiveness of the coordinated control technique is employed in the software of MATLAB/Simulink for grid-connected AC microgrid. The outcome of the simulation illustrates the superior effectiveness of the suggested controller over the traditional droop controller for huge power flows under disturbance with various operating conditions, under/overfrequency events, time delay, and noise. This grid encouragement capability for AC microgrids is anticipated to lead to novel possibilities for generating revenue.