ICOMOS has pointed out that digital technologies have become important ways to protect heritages. Existing researches focus on the digital reconstruction of heritage in virtual spaces. Less attention is paid to the utilization of heritage entities and the potential for virtual heritage interaction to present complex values of heritages. Augmented reality (AR) can integrate text, images, and models into digital information to add to heritages in real sites. This paper takes the Grand Canal, a great masterpiece of Chinese civilization and even human history, as a research object. With the acceleration of the urbanization process and the change in transportation patterns, the contradiction between the preservation of it and urban development has become increasingly prominent. Based on the analysis of heritage values, this research reconstructs digital models of heritages and develops interactions with them in the Unreal Engine, relying on mobile AR to create a novel cultural landscape through a combination of virtual and real Grand Canal. This research contributes to improving the material and cultural living standards of citizens by integrating heritage preservation and urban design through the design and development of this digital system.