<p>Virtual synchronous machines (VSMs), an advanced form of droop control, have received significant research interest owing to their ability to introduce rotational inertia to inverters. The normal operation of a VSM primarily relies on active power control. Reactive power outputs are approximately decoupled and can be regulated separately by controlling the frequency and voltage with an inductive output line impedance. In engineering, large inductors are often introduced to minimize the power coupling. However, this approach increases the line-voltage drop, which leads to additional power losses and introduces power-coupling issues at the point of common coupling. To address this limitation, this study proposes a simple and straightforward power-decoupling strategy that compensates for the power loss caused by the inductive line impedance. By integrating this strategy into existing active and reactive controllers, the compensated losses significantly reduced the impact of active power variations on the reactive power output, achieving an improvement of approximately 99.8%. Additionally, the strategy achieved 100% accuracy, eliminating the influence of reactive power fluctuations on the active power output and resulting in effective power decoupling. Finally, the effectiveness of the proposed strategy was verified under both strong and weak grid conditions, analyzing the impact of inverter output voltage and the line inductance on the voltage drop between the inverter and the grid. The overall performance was validated through PLECS simulation and hardware-in-the-loop (HIL) experiments conducted on a 250 kVA system.</p>