Chatter is an obstacle for achieving high-quality machining process and high production rate in industries. Chatter is an unstable self-exciting phenomenon that leads to tool wear, poor surface finish, and downgrade the milling operations. A novel active control strategy to attenuate the chatter vibration is proposed. PD/PID controllers in combination with Type-2 Fuzzy logic were utilized as a control strategy. The main control actions were generated by PD/PID controllers, whereas the Type-2 Fuzzy logic system was used to compensate the involved nonlinearities. The Lyapunov stability analysis was utilized to validate the stability of Fuzzy PD/PID controllers. The theoretical concepts and results are proved using numerical simulations. Although PD/PID controllers have been used for chatter control in machining process, the importance of stability along with the implementation of Type-2 Fuzzy logic system for nonlinearity compensation was the main contribution. In addition, active control using an Active Vibration Damper placed in an effective position is entirely a new approach with promising practical results.