<p>The Nanwang Water Diversion Hub, a core hydraulic heritage in the Ming-Qing Beijing-Hangzhou Grand Canal’s Huitong River section, was vital for water regulation and navigation. Using HEC-RAS, we constructed a numerical restoration model to simulate its impact on local hydraulics, water management, and navigation capacity. Simulations show the Hub crucially regulated water levels, improved navigation, and reduced riverbed erosion. By elevating levels, stabilizing flow, and mitigating hydraulic jumps, it significantly enhanced navigation safety. Precise energy distribution management boosted the canal’s diversion, storage, and drainage capacities, enabling sustainable water supply. Matching an optimal energy gradient effectively reduced local shear stress, inhibited erosion/sedimentation, strengthened channel stability, and prolonged canal lifespan. This study quantitatively reveals ancient composite hydraulic system mechanisms and provides a scientific basis for digital conservation, functional reconstruction, and sustainable utilization of this World Heritage canal. The methodology is applicable to other ancient canal heritage conservation.</p>