This paper presents an approach for oscillation damping with an integrated multi-stage linear quadratic regulator (MSLQR) FACTS controller combining power oscillation damping (POD) capabilities. The particle swarm optimization (PSO) technique has been used for precise tuning initial control parameters of power system stabilizers (PSS) and FACTS devices (such as STATCOM and UPFC) which results in improved controller performance. It is observed that the proposed control structure damps the oscillations adequately and is modular in design methodology. The sample power system comprising six areas is considered to demonstrate the effectiveness of the proposed concept. The states inter-relation which is shown with eigenvalues reflects better regulation with the proposed controller. The step response also validates the controller performance.