This paper proposes a strategy to improve the performance of a three-phase grid-connected inverter with an LCL filter. Oscillations that are typically induced by the interaction between the inductors and capacitor are eliminated with a negative virtual capacitor that nullifies the real capacitor's effect. Parameter estimation is needed because the filter parameters change during operation, due to temperature, current, and aging effects. Thus, an estimator is incorporated to ensure accurate compensation. The proposed method is integrated with a Lyapunov-function-based indirect grid current controller, to demonstrate the new method's compatibility with existing control approaches. The proposed method provides better attenuation of the oscillations with minimal impact on the grid side current controller. Extensive simulations verify the efficacy of the approach.