Wake effects in a wind farm (WF) include the wind velocity deficit and added turbulence. The wind velocity deficit may bring significant loss of the wind power and the added turbulence may cause extra fatigue load on the wind turbines (WTs). Inclusion of the wake effects in the wind farm control design can increase the total captured power by derating the upwind WTs. However, this may increase the turbulence and cause more fatigue load on the downwind WTs. This paper proposes an optimized active power dispatch strategy for WFs to maximize the total captured power while maintaining the fatigue load of the shafts and the towers within a certain range from the values using traditional strategy, which adopts maximum power point tracking (MPPT) control for each WT. A WT derating control strategy is included in the WT controller and the fatigue load for the tower and shaft is evaluated offline at a series of turbulence intensity, mean wind speed and active power reference to form a lookup table, which is used for the WF control. The proposed strategy is compared with WT MPPT control strategy and WF MPPT control strategy. The simulation results show the effectiveness of the proposed strategy.