A powertrain system includes an internal combustion engine having a crankshaft that fixedly couples to an input member of a multi-mode transmission including first and second torque machines. The transmission operates in one of a plurality of fixed-gear modes and variable modes through selective activation of first and second clutches. A control method includes, in response to a command to operate the multi-mode transmission in a fixed-gear mode, activating only the first clutch and commanding the engine to an OFF state. The first torque machine is controlled to generate a first torque output responsive to a drag torque that is offset by an engine reactive torque with the engine in the OFF state. The transmission operates in the fixed-gear mode by controlling the second torque machine to generate a second torque output responsive to an operator torque request and the first torque output of the first torque machine.