A recent development to compute free energy changes associated with chemical processes in condensed phase has been reviewed. The methodology is based on the hybrid quantum mechanical/molecular mechanical (QM/MM) approach combined with the novel theory of solution, where the electronic structure calculation in the QM subsystem is conducted by the Kohn-Sham density functional theory (KS-DFT) utilizing the real-space grids to represent the one-electron orbitals, while the distribution functions for MM molecules needed to compute the free energy change of interest is constructed in terms of the QM-MM interaction energies. The following sections are devoted to the overview of the existing methodologies for the free energy calculation for chemical event, and to the detailed description of the real-space based DFT as well as the theory of solution. Next we present a theory to combine the quantum mechanics with the statistical mechanics focusing on the treatment of the many body interaction inherent with the quantum mechanical object. Finally, the several applications of the methodology to the solution system are presented to demonstrate the accuracy and the efficiency of the method.