The Network lifetime is an important factor in WSN. This paper proposes a hybrid mechanism called "SUBCLUST" that combines clustering and subset formation. It is observed that randomization while dividing the subsets is not an efficient method to improve the lifetime of WSN. Hence in the proposed scheme during subset formation each sensor's coverage area is assumed to overlap with other sensor. The one with the least area of overlapping is added to the subset to which the current sensor belongs. This process continues until all the sensors are allotted to a particular subset. In order to minimize the energy consumption, scheduling is done in such a way that only one subset of nodes which covers the entire network will remain active at a time and making the remaining subset of nodes to get deactivated. Each subset will be activated one after another to ensure that no event is gone unnoticed. The proposed scheme also uses ARN (Active Routing Nodes) for packet forwarding which minimizes handoff while subset switching occurs. The proposed novel hybrid scheme has been validated using simulation studies and it is observed that the proposed scheme gives better performance than the existing work in terms of network lifetime, network coverage intensity, energy utilization and detection probability.