Nonlinear feedback control is proposed for implementation of an advanced dynamic control strategy for robot arms. Using differential geometric system theory we obtained necessary and sufficient conditions for the existence of a nonlinear feedback control for a general nonlinear system to be externally linearized and simultaneously output decoupled. An algorithm is given for the construction of the required nonlinear feedback. To design a dynamic control for robot arms we apply the above result to the JPL-Stanford arm and propose a new control strategy, which also contains an optimal error-correcting feedback. Simulation results show great promise for the obtained dynamic control strategy.