The invention comprises a lipid nano carrier based nanogel formulation of an active ingredient and method of their preparation. The formulation is specifically useful for dermal delivery or topical application of drugs which may be a hydrophilic drug including 5 fluorouracil (5 FU) and acyclovir or a hydrophobic drug such as isotretinoin. The invention is illustrated by a lipid nano carrier based nanogel formulation of 5 FU. A lipid nano carrier based nanogel formulation comprising 5 FU in a concentration of 0.001% to 10% w/w. A method of preparing lipid nano carrier based nanogel formulation of an active ingredient comprises the steps of: preparation of drug loaded vesicular lipid carrier dispersion wherein the surface of vesicles of the lipid carrier contains a surfactant probe sonicating the drug loaded vesicular lipid carrier dispersion of step (a.) to prepare a lipid nano carrier dispersion in nanometric size range concentrating the lipid nano carrier dispersion in nanometric range by steps of subjecting the lipid nano carrier dispersion in nanometric size range of step (b.) either to (i) rotary evaporation or (ii) freeze drying with or without a cryoproetctant preparation of hydrophilic gel and mixing of lipid nano carrier dispersion of step (c.) with hydrophilic gel of step (b) to form a lipid nano carrier based nanogel formulation.
