This paper deals with the voltage and frequency restoration problem for a droop controlled islanded microgrid (MG). A consensus based distributed control is proposed for voltage/frequency restoration of MG which allows all the distributed generator (DG) unit voltage magnitude and operating frequency to converge to the nominal values even with different communication topologies. The proposed control scheme is distributed in nature thereby eliminating the risk of single point failure because no central controller is required. Here, DG units need to communicate with their immediate neighbors only over a distributed communication network. The communication network has inherent transmission delays which can adversely affect the controller performance. Here, the impact of time delay is investigated on the proposed secondary controller of MG system. An islanded MG test system consisting of five DG unit, their respective loads, and transmission lines is simulated in MATLAB/Simulink to verify the performance of the proposed technique. © 2017 IEEE.