A new optimal proportional integral derivative (PID) controller is designed in this work in order to achieve dynamic stability for a Hydro Turbine Generating (HTG) unit under various operating conditions. The proposed controller minimizes a Quadratic Performance Measuring Index (QPMI) in order to find the optimal Proportional Integral Derivative (PID) parameters via a Linear Quadratic Regulator (LQR) method. The results obtained were compared with that of a traditional optimal PID controller, which uses conventional root-locus method to tune the PID parameters. The comparison between the two controllers is done with respect to time domain responses which show superior performance of the proposed optimal PID controller in terms of rise time, settling time and maximum overshoot in comparison to traditional optimal controller.