Static compensators (STATCOMs) are often used in distribution systems to enhance power quality. There is a need to enhance the performance of STATCOM to optimize its utilization and facilitate the provision of additional ancillary services. This paper employs the multilayer discrete noise-eliminating second order generalized integrator (MDNESOGI) to regulate the quasi-impedance source inverter (qZSI)-STATCOM for power exchange with the grid. Compared to conventional second-order generalized integrator (SOGI), MDNESOGI exhibits a higher capability for rejecting DC offset. In instances of abnormal grid operation or system malfunction, the inclusion of DC rejection capability enhances the robustness and reliability of the system. The suggested control algorithm only requires two integrators, three mathematical operators, and a damping factor, making it far easier to implement than transformation-based methods. The distorted load current is broken down into its active and reactive components using this control mechanism. The reference currents are then calculated by multiplying these parts by their corresponding voltage standards. The DC offset is reduced and transient oscillations in the weight component are eliminated by adjusting the damping factor. The suggested algorithm effectively handles power quality tasks like (a) reducing harmonic distortion, (b) compensating for reactive power, (c) adjusting for power factor, and (d) balancing the load under different conditions in the distribution system. The experimental study results are used to examine the stability of the proposed control scheme in both static and dynamic scenarios. In addition, a comparison to traditional methods is provided to demonstrate the new method’s superiority. Experimentation results show that the suggested controller is superior to its contemporaries in all scenarios where power quality is a factor, meeting the IEEE standard requirements.