The estimation of modal decay parameters from noisy measurements of reverberant and resonating systems is a common problem in audio and acoustics, such as in room and concert hall measurements or musical instrument modeling. Reliable methods to estimate the initial response level, decay rate, and noise floor level from noisy measurement data are studied and compared. A new method, based on the nonlinear optimization of a model for exponential decay plus stationary noise floor, is presented. A comparison with traditional decay parameter estimation techniques using simulated measurement data shows that the proposed method outperforms in accuracy and robustness, especially in extreme SNR conditions. Three cases of practical applications of the method are demonstrated.