The hybrid extraction-distillation separation system is a process combining liquid-liquid extraction and also distillation. This hybrid system can be viewed as a derivative of the heterogeneous azeotropic distillation method. In this work, the potential for significant energy-saving via this hybrid process is demonstrated with both conceptual illustration and a case study of n-propanol dehydration. Diisopropyl ether (DIPE) is selected as the extraction solvent considering its favorable properties of density, heat of vaporization, and lower toxicity. Since the solvent flow rate is the most important design degree-of-freedom in this process that influences overall energy consumption, an iterative optimization procedure is conducted to minimize total annual cost. Furthermore, a novel control strategy is proposed on the basis of closed loop, and open-loop sensitivity tests. Here, an adjustable solvent flow rate during dynamic control allows steady-state operation at the optimal condition. Dynamic simulation results show that both n-propanol and water products can still be maintained at high purities despite large variations in feed flow rate and feed composition disturbances.