We propose a novel and simple method for the laser isotope separation of 176Lu a precursor for the production of177Lu medical isotope. The physics of the laser-atom interaction has been studied through the dynamics of the atomic level populations using the density matrix formalism. It has been shown that a combination of cw excitation lasers and pulsed ionization laser can be used for the laser isotope separation of 176Lu. The optimum conditions for the efficient and selective separation of 176Lu have been derived by studying the time evolution of level population under laser excitation. It has also been shown that, it is possible to produce ~100% enriched 176Lu isotope at a rate of 5 mg / hour, which is higher than all previously reported methods so far. The isotope separation process proposed can be easily adopted using off-the-shelf lasers, for similar atomic systems.