Evaluating and updating the obstacle avoidance velocity for an autonomous robot in real-time ensures robustness against noise and disturbances. A passive damping controller can obtain the desired motion with a torque-controlled robot, which remains compliant and ensures a safe response to external perturbations. Here, we propose a novel approach for designing the passive control policy. Our algorithm complies with obstacle-free zones while transitioning to increased damping near obstacles to ensure collision avoidance. This approach ensures stability across diverse scenarios, effectively mitigating disturbances. Validation on a 7DoF robot arm demonstrates superior collision rejection capabilities compared to the baseline, underlining its practicality for real-world applications. Our obstacle-aware damping controller represents a substantial advancement in secure robot control within complex and uncertain environments. The extended article with detailed proofs is available online (Huber et al., 2024).