In this paper, we present a new synthesis method to control air-fuel ratio (AFR) in lean-burn spark ignition engines to maximize the fuel economy. The major challenge in the control of AFR for lean-burn engines is the large time-varying delay in the control loop which restricts the application of conventional control techniques. Time-varying delay in the system dynamics is first approximated by the Padé approximation which renders the system dynamics into non-minimum phase characteristics. Application of dynamic compensators is invoked to retrieve unstable internal dynamics. The associated error dynamics is utilized to construct a PID controller combined with a dynamic compensator to track the desired AFR command using the feedback from the universal exhaust gas oxygen (UEGO) sensor. The proposed method is shown to achieve desired dynamic properties independent of the matched and unmatched disturbances. Results of applying the proposed method to experimental data demonstrate the closed-loop system stability and performance against time-varying delay, canister purge disturbances and measurement noise.