This study employs the free-weighting matrix approach to investigate the output feedback control of a linear discrete-time system with an interval time-varying delay. First, the delay-dependent stability is analyzed using a new method of estimating the upper bound on the difference of a Lyapunov function without ignoring any terms; and based on the results, a design criterion for a static output feedback (SOF) controller is derived. Since the conditions thus obtained for the existence of admissible controllers are not expressed strictly in terms of linear matrix inequalities, a modified cone complementarity linearization algorithm is employed to solve the nonconvex feasibility SOF control problem., Furthermore, the problem of designing a dynamic output feedback controller is formulated as one of designing an SOF controller. Numerical examples demonstrate the effectiveness of the method and its advantage over existing methods.