A genetic algorithm program, combined with the finite difference method (GA-FDM), was developed to obtain the optimum location of the cut-off wall under the hydraulic structures to solve the seepage issues. For the optimization formulation model, the objective function was considered to minimize the total cost of the hydraulic structure construction. The major nonlinear constraints were formulated to meet uplift pressure and exit gradient safety considerations. In two phases, the GA-FDM model provided here satisfies the criteria of an optimal hydraulic design. Initially, a numerical model that has been validated and coded using the finite difference method (FDM), was employed to investigate the seepage issue. This was followed by the use of the genetic algorithm optimization model coded by the MATLAB programming with a finite difference program as a sub-routine to find the optimum position and depth for the cut-off wall. The numerical and optimization models were linked using MATLAB code, resulting in a Simulation–Optimization (S–O) approach. According to the findings, the suggested GA-FDM approach would offer an efficient, safe and cost-effective cut-off wall design. When the proposed S–O approach is applied to determine the optimum locations and depths of the upstream and downstream cut-off walls with respect to minimizing the construction cost, the cost of the safe dam floor is reduced by 60–77%. Finally, the optimum location ratio is approximately 0.22 and 0.94 from the hydraulic structure’s floor’s toe for the upstream and downstream cut-offs, respectively.