The competition in the launch industry is getting more tight and dynamic. At these circumstances, the launch vehicle development duration becomes extremely important as well as minimizing launch cost. The engine cost is the most significant fraction of total vehicle cost. One of the potential ways to reduce development duration and cost is through using a system design approach applied to liquid rocket engine optimization taking into account the mass and dimensional constraints. The authors of this paper, utilizing a system engineering approach, started the development of the design system focused on the preliminary design of the entire liquid rocket engine and its components. The preliminary estimation of the liquid rocket engine cycle parameters, preliminary design of the turbopump and a thrust nozzle were considered in the authors’ previous paper. This paper describes the task of optimum engine layout, considering a number of criteria, such as engine compactness and minimal mass, minimal pressure and heat losses in pipes, the static and dynamic strength of the engine overall and its components, and the ease of assembly and maintainability. Crucial aspects of parallel and sequential engine layouts are discussed. The orientation of the turbopump relative to the thrust nozzle gyroscopic effects were taken into account. Optimal engine layout search peculiarities for first, second and upper stages are described. All the aspects of optimal liquid rocket engine layout selection were implemented in an integrated system of physic based models which allows searching for the best possible configuration within the defined constraints. The results of the application of the system and benefits from its utilization are presented.