A presence of a high amplitude periodic signals in the output responses from operating structures often pose a challenge for output-only system identification and, in case of health monitoring, damage detection/localization methods. This paper introduces a pre-processing approach that removes the harmonic part from the output signals directly in the time domain. The new method uses orthogonal projections of the harmonic realization of the signal onto the raw time series within the stochastic subspace framework. Proposed algorithm is tested on two experimental examples. First, an aluminum plate excited with both random white and periodic excitations. Second, a full-scale industrial case of a ferry excited by a random environmental load with harmonic interference from a rotating machinery on-board. In both cases the proposed method removes the harmonics from the structural responses while leaving the random part of the output signal.