A novel digital implementation of speed controller for a Permanent Magnet Synchronous Motor (PMSM) with disturbance rejection using conventional observer combined with Extended Kalman Filter (EKF) is proposed. First, the EKF is constructed to achieve a precise estimation of the speed and current from the noisy measurement. Second, a proportional integral derivative (PID) controller is developed based on Linear Quadratic Regulator (LQR) to achieve speed command tracking performance. Then, an observer is designed and its error is utilized to provide load disturbance compensation. The proposed method greatly enhances the PMSM performance by reducing the control signal variation as well as the disturbance. The speed control performance is significantly improved compared to the case when we have an observer acting alone. The simulation results for the speed response and variation of the states when the PMSM is subjected to the load disturbance are presented. The results verify the effectiveness of the proposed method.