Abstract: To the problem of state observer design which is considered for a class of Lipschitz nonlinear systems with time-delay, new type full-order and reduced-order observers were given. Sufficient conditions for observers were presented by line matrix inequality (LMI) and proven through constructing Lyapunov function. The results indicated that the gain matrixes of full-order and reduced-order observers can be obtained easily by soluting line matrix inequality, so the solving process of the gain matrixes is simplified and the approach avoids the blindness of selecting the gain matrix. The simulation results for the model showed that the two kinds of state estimate errors converge to zero quickly, which indicates that the approach is effective.