Abstract This paper explores the development of an LMI design of observer-based output feedback control synthesis of discrete-time nonlinear systems in the form of Takagi-Sugeno (T-S) fuzzy model via adopting a multilateral matrix methodology. Based on our previous results, this paper presents an improved innovated synthesis design solution by introducing a few more of slack matrix variables. This advanced approach is developed further while the relative sizes among different normalized fuzzy weighting functions are utilized via additionally employing certain matrix variables hence its proof has been refined too. Thus, some weak points of the previous synthesis design have been refined and a desired solution is provided reducing some conservatism and computation complexity alleviation. The effectiveness of the proposed innovated approach is demonstrated by means of appropriate examples.