An islanding operation of a distribution network is a topic of interest due to the significant penetration of distributed generation (DG) in a power system network. However, controlling the frequency of an islanded distribution system remains an unresolved issue, especially when the load exceeds the generation. This paper presents a new technique for a successful islanding operation of a distribution network connected with multiple mini hydro based DGs. The proposed technique is based on three main parts. The first part uses an islanding detection technique to detect the islanding event correctly. The second part consists of a power imbalance estimation module (PIEM), which determines the power imbalance between the generation and load demand. The third part consists of a load shedding controller, which receives the power imbalance value and performs load shedding according to load priority. The proposed technique is validated on an 11 kV existing Malaysia distribution network. The simulation results show that the proposed technique is effective in performing a successful islanding operation by shedding a significant number of loads.