This paper investigates the optimal co-design of both physical plants and control policies for a class of continuous-time linear control systems. The optimal co-design of a specific linear control system is commonly formulated as a nonlinear non-convex optimisation problem (NNOP), and solved by using iterative techniques, where the plant parameters and the control policy are updated iteratively and alternately. This paper proposes a novel iterative approach to solve the NNOP, where the plant parameters are updated by solving a standard semi-definite programming problem, with non-convexity no longer involved. The proposed system design is generally less conservative in terms of the system performance compared to the conventional system-equivalence-based design, albeit the range of applicability is slightly reduced. A practical optimisation algorithm is proposed to compute a sub-optimal solution ensuring the system stability, and the convergence of the algorithm is established. The effectiveness of the proposed algorithm is illustrated by its application to the optimal co-design of a physical load positioning system.