In combined heat and power (CHP) plants, reverse osmosis (RO) based flue gas condensate treatment processes have shown several intrinsic problems including bio-fouling and higher electrical energy demand. In contrast, novel membrane separation techniques can operate at reduced electricity demand, provide better separation efficiency and are not prone to bio-fouling. As shown in our previous studies, membrane distillation (MD) has proven itself as a promising technique for such applications. MD is a thermally driven separation process where district heating (DH) can be considered as a viable heat source to comply with its required thermal energy demand. In the present study, a DH driven MD process is presented and evaluated. Performance model of MD system was first developed in MATLAB, based on previously performed experiments where semi-commercial air gap membrane distillation (AGMD) module was considered. This empirical model was then employed to design DH driven MD system in Aspen Plus for flue gas condensate cleaning at industrial scale. Furthermore, in order to evaluate the potential of the technology, feasibility study of the proposed system was performed. Results show the techno-economic viability of the presented DH integrated MD system. The estimated unit flue gas condensate treatment cost is found as low as 2.38 $/m³.