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We report a hybrid system, fabricated from nanostructured lipid particles and polysaccharide based hydrogel, for sustained release applications. Lipid particles were prepared by kinetically stabilizing self-assembled lipid nanostructures whereas the hydrogel was obtained by dissolving kappa-carrageenan (KC) in water. The drug was incorporated in native as well as lipid particles loaded hydrogels, which upon dehydration formed thin films. The kinetics of drug release from these films was monitored by UV–vis spectroscopy while the films were characterized by Fourier transform infra-red (FTIR) spectroscopy and small angle X-ray scattering techniques. Pre-encapsulation of a drug into lipid particles is demonstrably advantageous in certain ways; for instance, direct interactions between KC and drug molecules are prohibited due to the mediation of hydrophobic forces generated by lipid tails. Rapid diffusion of small drug molecules from porous hydrogel network is interrupted by their encapsulation into rather large sized lipid particles. The drug release from the lipid-hydrogel matrix was sustained by an order of magnitude timescale with respect to the release from native hydrogel films. These studies form a strong platform for the development of combined carrier systems for controlled therapeutic applications.