A three-dimensional memory device includes an alternating stack of insulating layers and electrically conductive layers, memory openings vertically extending through the alternating stack, memory opening fill structures located within a respective one of the memory openings, and a drain-select-level isolation structure. One of the insulating layers is a composite insulating layer including an insulating-material-containing sublayer consisting essentially of an insulating material and an etch stop dielectric material sublayer having a material composition that is different from the insulating material. The etch stop dielectric material sublayer can be employed as an etch stop structure during formation of the drain-select-level isolation structure through drain-select-level electrically conductive layers.