A consensus control algorithm based on observers is proposed for linear multi-agent systems where the states of systems are unmeasurable and the communication time is delayed. The observer is designed to be used in solving unmeasurable states of agents. Then, a control protocol is proposed to realize consensus of linear multi-agent systems with time-varying delay. The formal system is transformed into a new system using model transformation. According to this system, the stability of the system is analyzed via constructing the Lyapunov-Krasovskii function, and the coefficient matrixes are obtained by solving linear matrix inequalities. Finally, Matlab simulation is conducted to demonstrate the effectiveness of the proposed method.