Modular Multilevel Converter (MMC) are increasingly used in Medium Voltage and High Voltage industries for various applications. In this paper, averaging and circulating current control integrated with Selective Harmonic Elimination (SHE) modulation based on Nearest Level Control (NLC) is proposed in order to improve the performance of MMC in terms of stable operation and harmonic performance compared to existing state of art. The methodology to design the parameters of averaging and circulating current controller based on pole-zero cancellation is expounded. Further, the control techniques are integrated with SHE based NLC in order to achieve good control of state variables and superior harmonic performance. The simulation studies are carried out for a 11kV, 25MVA MMC in MATLAB/Simulink. The performance of the proposed SHE-NLC is compared with conventional NLC in terms harmonic performance in the output parameters such as voltage and current. © 2018 IEEE.