This paper proposes a novel optimization technique for simultaneous coordinated designing of power system stabilizer (PSS) and static VAR compensator (SVC) as a damping controller in the multi-machine power system. PSO and chaos theory is hybridized to form a chaotic PSO (CPSO), which reasonably combines the population-based evolutionary searching ability of PSO and chaotic searching behavior. The coordinated design problem of PSS and SVC controllers over a wide range of loading conditions are formulated as a multi-objective optimization problem which is the aggregation of the two objectives related to the damping ratio and damping factor. The proposed damping controllers are tested on a weakly connected power system. The effectiveness of the proposed controllers is demonstrated through the eigenvalue analysis and nonlinear time-domain simulation. The results of these studies show that the proposed coordinated controllers have an excellent capability in damping power system inter-area oscillations and enhance greatly the dynamic stability of the power system. Moreover, it is superior to both the manually coordinated stabilizers of the PSS and the SVC damping controller.