When dealing with large-scale systems, manual selection of a subset of components (sensors/actuators), or equivalently identification of a favourable structure for the controller, that guarantees a certain closed-loop performance, is not very feasible. This paper is dedicated to the problem of concurrent optimal selection of actuators/sensors which can equivalently be considered as the structure identification for the controller. In the context of a multi-channel dynamic output feedback controller synthesis, we formulate and analyse a framework in which we incorporate two extra terms for penalising the number of actuators and sensors into the variational formulations of controller synthesis problems in order to induce a favourable controller structure. We then develop an explicit scheme as well as an iterative process for the purpose of dealing with the multi-objective problem of controller structure and control law co-design. It is also stressed that the immediate application of the proposed approach lies within the fault accommodation stage of a fault tolerant control scheme. By two numerical examples, we demonstrate the remarkable performance of the proposed approach.