Purpose: This paper aims to integrate control systems to minimize vibration in rotating machinery, specifically focusing on propulsion shaft systems. The effectiveness of magnetorheological (MR) dampers in reducing vibration across various operational scenarios is assessed. Methods: The research paper involves the development and validation of numerical models for both the propulsion shaft system and MR dampers, followed by experimental validations to verify model accuracy. These validated models are integrated to simulate controlled propulsion shaft systems equipped with MR dampers. A state-space formulation and Linear Quadratic Gaussian (LQG) control law are employed to devise a propulsion shaft system controller that coordinates the operation of MR dampers for vibration mitigation and improved dynamic performance. Results: Simulation outcomes reveal notable decreases in vibration levels at varying rotational speeds, with higher speeds exhibiting more pronounced reductions. At lower speeds (50 rpm), vibration reduction indices show decreases of about 12.47% at 25 Hz and 18.75% at 175 Hz. At higher speeds (100 rpm and 150 rpm), substantial decreases in vibration levels are observed, with corresponding vibration reduction indices reaching 28.86% and 36.53%, respectively. Conclusion: Frequency domain analysis highlights the enhanced dynamic performance achieved through control interventions. The study offers valuable insights for improving the efficiency and reliability of industrial machinery by demonstrating the efficacy of MR dampers in vibration reduction across various operational scenarios.