This paper suggests an observer based control approach for fully active hybrid energy storage system (HESS) comprising of two storage elements such as supercapacitor (SC) and battery, two bidirectional DC–DC converters and variable load. In order to formulate a control approach for this hybrid system, theunmeasured dynamics of the system must be available. This engenders the design of a robust exponential state observer in this paper to estimate various unknown system variables such as load, battery and SC currents/ voltages. Furthermore, this paper also renders an integral terminal sliding mode control (ITSMC) concatenated with Proportional Integral (PI) based Lyapunov’s function technique to robustly track the reference battery current, SC current and load voltage in finite time in the presence of lumped system uncertainties. Therobustness, stability and finite time convergence properties of the closed loop system with the proposed technique are demonstrated through analytical approach. Simulated results are validated with the proposed methodology through various case studies and compared with LMI (linear matrix inequalities) based robust control techniques presented in literature.