Panel flutter suppression by exact state transformations and feedback control using piezoelectric actuation is presented. A nonlinear control system is designed for a simply supported rectangular panel with bonded piezoelectric layers based on the von Kármán large-deflection plate theory. The governing nonlinear partial differential equation for the panel is reduced to a set of ordinary differential equations using a two mode approximation. Distributed piezoelectric actuators and sensors connected to processing networks are used as modal actuators and sensors to actively control panel vibrations. The control inputs are given by the electric fields required to drive the actuators based on piezoelectric actuation. Nonlinear feedback control laws are formulated through a transformation of the discretized nonlinear system into an equivalent controllable linear system. The simulated results show that the resulting closed-loop system based on feedback linearized controllers effectively suppress panel flutter limit-cycle motions.