During cascading failure in a power system, intentional controlled islanding is deemed as the last resort that prevents complete power system collapse. However, there exist two major challenges in the process of partitioning a power system: (a) optimal coordination of circuit breakers to trip candidate transmission lines, and (b) ensuring large steady state and transient stability margins to prevent further outages in smaller islands. This paper addresses the challenge of creating stable partitions. Contrary to the traditional methods, the developed islanding method is considered to be dynamic, i.e. the lines to be disconnected during an island are not pre-determined, rather, depend on real-time system conditions. Highly stable partitions alleviate frequency problems in the smaller islands, minimize load loss, and reduce dependency on large black-start units. Simulations are performed on synthetic Illinois 200-Bus system considering different number of islands and loading conditions.