The invention discloses a virtual synchronous generator control method capable of restraining output power oscillation. A frequency detection method based on an SDFT algorithm is adopted in the control strategy of the virtual synchronous generator, so that accurate measurement on the voltage frequency of a power grid is realized, and the accuracy of Pref is guaranteed; meanwhile, a virtual automatic frequency regulator is introduced in the control of active power regulation, and the frequency adjustment is realized by adopting a proportional link. The rotational inertia and the damping characteristic of the synchronous generator are simulated in active power control; reactive droop control and a virtual voltage regulator are introduced into reactive power regulation, wherein the virtual voltage regulator adopts a proportional link; and the simulation of the rotational inertia and the damping characteristic is realized by a grid-connected inverter, the active power and the reactive power are adjusted during grid connection, the detection speed and accuracy of the voltage frequency of a grid-connected point are improved, the self-output frequency and power fluctuation restraining capacity of the inverter are enhanced, the inhibition capability of interference fluctuation is improved, the stability of the system is improved, and the system performance is ensured to be stable and reliable.