Intentional controlled islanding (ICI) is a final resort for preventing a cascading failure and catastrophic power system blackouts. This paper proposes a controlled islanding algorithm that uses spectral clustering over multi-layer graphs to find a suitable islanding solution. The multi-criteria objective function used in this controlled islanding algorithm involves the correlation coefficients between bus frequency components and minimum active and reactive power flow disruptions. Similar to the previous studies, the algorithm is applied in two stages. In the first stage, groups of coherent buses are identified with the help of modularity clustering using correlation coefficients between bus frequency components. In the second stage, the ICI solution satisfying bus coherency with minimum active and reactive power flow disruptions is determined by grouping all nodes using spectral clustering on the multi-layer graph. Simulation studies on the IEEE 39-bus test system demonstrate the effectiveness of the method in determining an islanding solution in real time while addressing the generator coherency problem.