In this paper, a distributed multi-agent scheme is presented for reactive power management with renewable energy sources (RESs). The multi-agent system (MAS) framework is developed for distribution systems to improve the stability which is mostly dominated by voltage and the agents in this framework coordinate among themselves using online information and energy flow. In this paper, the agents basically perform two tasks- reactive power estimation and necessary control actions. The topology of distribution network is used to estimate the required reactive power for maintaining voltage stability where distributed static synchronous compensators (DSTATCOMs) are used to supply this reactive power. The DSTATCOM is controlled by using a linear quadratic regulator (LQR) controller within the agent framework. The proposed scheme is further compared with the conventional approach to validate the simulation results.