This paper considers the position tracking problem of a voltage-controlled magnetic levitation system (MLS) in the presence of modelling errors caused by uncertainties in the system's physical parameters. An adaptive control based on fast online algebraic parameter estimation and generalised proportional integral (GPI) output feedback control is considered as a control scheme candidate. The GPI controller guarantees an asymptotically exponentially stable behaviour of the controlled ball position and the possibilities of carrying out rest-to-rest trajectory tracking tasks. The nature of the control input gain in an MLS is that of a state-dependent time-varying gain, reflecting the nonlinear character of the magnetic force with regard to the distance and the properties of the metallic ball. The system gain has therefore been locally approximated using a periodically updated time polynomial function (of second degree), where the coefficients of the polynomial are estimated during a very short period of time. This estimation is achieved using the recently introduced algebraic online parameter estimation approach. The stability of the closed-loop system is demonstrated under the assumption that no external factors cause changes in the parameter during the time interval in which the stability is analysed. Finally, experimental results are presented for the controlled MLS demonstrating the excellent stabilisation and position tracking performance of the control system designed in the presence of significant nonlinearities and uncertainties of the underlying system.