In district heating, conventional flue gas heat recovery systems do not perform well anymore when the return water temperature is high. In this paper, a hybrid heat recovery system based on vapor compression refrigeration and liquid desiccant dehumidification is then proposed, with proper refrigerants and desiccants recommended. A simulation model of this system is established and a typical case is studied based on the model with a return water temperature of 60 degrees C. Then, an equivalent thermal efficiency is introduced to evaluate the system performance. Parametric analyses are conducted by changing the liquid-gas flowrate ratio and the inlet solution temperature in the second stage of the absorber in the system. According to the parametric analyses, a liquid-gas mass flowrate ratio of 3.2-3.4 and an inlet solution temperature of 45 degrees C are recommended as the best working conditions considering the economic and ecological effects. Under these conditions, the equivalent thermal efficiency of a boiler can be increased from 90% to 104%. For a boiler with a rated heating capacity of 7 MW, about CNY 236,000 (USD 34,000) can be saved per month. Besides, the flue gas is finally discharged at a relative humidity of only 33%. The formation of white smoke can thus be avoided and the contaminant attachment in the atmosphere around can be alleviated. The proposed system is efficient and environmentally friendly and the simulation results can offer references to real applications under variable working conditions.