This paper presents a generalized direct power control (DPC) scheme for grid connected multilevel converters. The proposed method extends the original DPC operating principle by considering only for selection the closest vectors to the present switching state. This approach requires the power derivatives for feedback, which can present numerical implementation problems in real time. Therefore a grid virtual flux based observer is proposed to overcome this issue. The proposed method is applicable to any multilevel converter topology of any number of levels. In this paper simulations results are presented for a 9 level cascaded H-bridge converter. The proposed solution enables DPC for multilevel converters used in medium voltage applications while improving overall power quality and efficiency of the system.