In this study, a fault tolerant control strategy for a rotary wing aircraft is proposed in the presence of actuator faults. A linear mathematical model which is derived from the nonlinear model by using MATLAB/Simulink. AN observer based state estimation approach is widely used in fault tolerant area. Generalized Observer Scheme (GOS) based on Unknown Input Observer (UIO) is utilized to detect and isolate the actuator faults. In fault-free conditions, Linear Quadratic Tracking (LQT) is preferred to stabilize the quadrotor to obtain a faster system response. When it comes to a faulty case, LQT cannot handle the compensation of steady-state error owing to power loss in the actuator. Therefore Linear Quadratic Regulator (LQR) with integral action is selected by the fault diagnosis unit to compensate steady-state error due to the actuator fault. Simulation results are presented to demonstrate the performance of the proposed fault tolerant control strategy.