Earth-fill dams play a critical role in water resource management, flood control, and agricultural water supply. However, seepage control and pore water pressure reduction remain key challenges for ensuring their long-term safety and performance. This study employs numerical modeling using Seep/W software (GeoStudio) to investigate the influence of clay cover length and thickness on the hydraulic performance of an earth-fill dam located in East Azerbaijan, Iran. The effects of lengths (59.6, 73.3, 93, and 100 m) and thicknesses (0.5, 1.0, 1.5, and 1.8 m) on seepage flow rate, hydraulic gradient, and pore water pressure were systematically analyzed. Results indicate that increasing the clay cover thickness to 1.5 m reduced seepage flow by 55.22%, while increasing the length to 93 m resulted in a 48.81% reduction. Further increases in length and thickness did not yield significant additional reductions in seepage, demonstrating that a length of 93 m and a thickness of 1.5 m are optimal. Moreover, a clay cover thickness of 1.5 m reduced the exit hydraulic gradient by 60.60% and pore water pressure by 56.94%, whereas increasing the length to 93 m reduced these parameters by 47.47% and 41.58%, respectively. Economic analysis revealed that optimizing the clay cover dimensions reduced excavation volume by 50%, height by 30%, and thickness by 40%, and operational costs by up to 30%, while improving hydraulic performance by 70%. These findings confirm that the optimal clay cover dimensions (length: 93 m; thickness: 1.5 m) not only substantially reduce seepage and enhance hydraulic performance but also provide an innovative, cost-effective approach to earth-fill dam design by significantly lowering operational costs.