This paper proposes a robust optimal nonlinear control with an observer to reject the offset errors of position tracking for surface mounted permanent magnet synchronous motors. We provide the control method to reject offset errors and load torque for designing field oriented control (FOC) based the alternating current (AC) frame. The proposed method consists of a torque generator, a commutation scheme, an electrical controller, and a load torque observer. The mechanical controller is designed to compensate for load torque and the offset error and generate the desired torque. The commutation scheme is proposed to create the desired currents for the desired torque. The electrical controller is developed to guarantee the desired currents. The observer is designed to estimate both the velocity and the load torque. In order to obtain the robustness to parameter uncertainties and a gain tuning guide, the linear quadratic regulator method is applied to the proposed method. The closed-loop stability is proven. A detailed process for the FOC design and an analysis of the control methods based on the AC frame are presented. The performance of the proposed method was validated via experiments. The proposed method obtains the FOC based on the AC frame. Furthermore, the position tracking performance of the proposed method is superior to that of the conventional method.