In this paper, we propose a design method of an observer-based controller for nonlinear differential algebraic equation (DAE) systems. We transform a DAE system to an explicit ordinary differential equation (ODE) system that is restricted to an invariant manifold by differentiating the original DAE repeatedly. If the DAE is non-regular, we add integrators to inputs to avoid impulse modes. We design a state feedback law that incorporates redundant state variables and an observer that estimates all of these variables simultaneously. We also give a set of sufficient conditions for the global stability of the control system. The efficiency of the controller is demonstrated by computer simulation.