Inter-area low frequency electromechanical oscillation deteriorates the stability of interconnected power system and limits the capacity of transmission system. In smart grid, with installation and development of phase measurement unit and wide-area measurement system, wide-area damping controller is a popular method to suppress electromechanical oscillation. However, the performance of wide-area damping controller will be deteriorated if associated sensors are corrupted or interrupted due to software/hardware failure. In this paper, Prony method and residue method are used to design a conventional wide-area damping controller firstly. Then, a novel federal-Kalman-filter-based fault-tolerant controller is proposed. Finally, the simulation verification is undertaken on a four-machine two-area parallel AC/DC system in MATLAB/Simulink. Compared with the conventional wide-area damping controller, the simulation results show that the proposed fault-tolerant wide-area damping controller is able to eliminate the electromechanical oscillation effectively when the remote feedback signal is subject to noise interference.