In order to damp the resonance in the MMC-based Arbitrary Wave shape Generator (AWG) used for high voltage testing, an active damping control methodology is proposed in this paper instead of the passive damping with an arm resistor. It is vital to ensure the system’s stability when such an active damping closed loop control is implemented. Consequently, optimal parameters of a PI controller are designed by analyzing the stability margins of the involved transfer function using Bode-Plots. The performance of the designed active damping control methodology and the PI controller have been demonstrated with a 50 Hz sinusoidal waveform and arbitrary waveforms such as triangular, trapezoidal, and complex waveforms in MATLAB-Simulink. These results proves that the output voltage can track the reference without any reasonable error and does not contain any resonant frequency. Additionally, the Total Harmonic Distortion (THD) of the sinusoidal waveform and other arbitrary waveforms is less than 1% with the Phase Shift Carrier (PSC) modulation technique.