This paper deals with the joint optimization problem of high-order error-feedback and realization for minimizing roundoff noise at the output of a closed-loop system with a full-order observer feedback system subject to l2-scaling constraints. It is shown that the problem can be converted into an unconstrained optimization problem by using linear-algebraic techniques. The unconstrained optimization problem at hand is then solved iteratively by employing an efficient quasi-Newton algorithm with closed-form formulas for key gradient evaluation. A case study is presented to demonstrate the validity and effectiveness of the proposed technique.