The paper addresses a real-time optimization-based reference calculation integrated with a control structure for Modular Multilevel Converters (MMC) operating under normal and constrained situations (where it has reached current and/or voltage limitations, e.g. during system faults). The algorithm prioritizes to satisfy the Transmission System Operators (TSO) AC grid current demanded set-points. The constrained optimization problem is formulated based on the steady-state model of the MMC, whereby the prioritization is achieved through distinct weights defined in the Objective Function’s (OF) terms. The resultant optimization problem, however, is highly nonlinear requiring high computation burden to be solved in real-time. To overcome this issue, this paper applies a Linear Time-Varying (LTV) approximation, where the nonlinear dynamics of the system are represented as constant parameters, while a Linear Time-Invariant (LTI) system is used to formulate the optimization constraints. The converter's current references are determined in real-time by solving a constrained linearized optimization problem at each control time step, considering the TSO's demands, the current MMC operating point and its physical limitations. Finally, the linearized-optimization problem is integrated with the MMC controllers and evaluated under different network conditions, where the results indicated that method can be potentially employed to obtain the MMCs current references.