Most mining hydraulic systems use water-based emulsions as the transmission medium. However, the low viscosity of water-based fluids causes leakage, making proportional flow control in water hydraulic systems challenging and preventing precise positioning of hydraulic cylinders. To achieve continuous flow control in water-based fluids, this research proposes a novel backstepping adaptive controller integrated with an extended sliding mode observer (ESMO). By using additional pressure sensors, continuous proportional control of the output flow of a two-stage high-speed on/off valve (TSHSV) can be realized. The ESMO estimates the valve spool position and unmodeled disturbances based on the current in the coil winding, and system output flow is derived from the spool position. An adaptive controller adjusts the spool position to control the entire system’s flow output, achieving proportional flow control. Simulation and experimental results validate the control accuracy of the system. The results show that the system’s performance surpasses that of proportional valves in many respects.