Purpose: To find an optimum design of a high‐dose rate Yb‐169 brachytherapy source for gold nanoparticle‐aided radiation therapy (GNRT). Previous studies suggested that the gamma‐ray energy spectrum of Yb‐169 could be almost ideal for a brachytherapy implementation of GNRT. The current study was aimed to design a new Yb‐169 source that would maximize dose enhancement during GNRT while meeting practical constraints for manufacturing a clinically‐relevant brachytherapy source. Methods: Monte Carlo simulations were conducted using the MCNP5 code to determine spectral changes caused by four different Yb‐169 source designs and associated variations in macroscopic dose enhancement across the tumor/ICRU tissue loaded with gold nanoparticles at 0.7% by weight. The first three source models had a single encapsulation made of aluminum, titanium, or stainless steel, while the last source model adopted a dual encapsulation design with an inner aluminum capsule and an outer titanium capsule. Results: The results showed spectral changes dependent on source design and their correlation with dose enhancement. The aluminum‐encapsulated source showed the lowest intensity‐weighted average energy of 108.9 keV, and the greatest dose enhancement of 51.0% at 1 cm away from the source center. The sources encapsulated by titanium and aluminum/titanium combination showed similar levels of dose enhancement, 49.2% and 49.3%, and average energies of 113.3 keV and 112.5 keV respectively. The source encapsulated with stainless steel exhibited the smallest dose enhancement, 43.8%, and the highest average energy of 126.6 keV. Conclusion: The current investigation suggests that the attainable macroscopic dose enhancement during GNRT with an Yb‐169 source can be further increased by encapsulating the Yb‐core with aluminum, titanium or aluminum/titanium combination, instead of stainless steel. Due to its structural integrity and improved safety during manufacturing and clinical uses, the dual encapsulation design would be preferred.