We propose a Lagrangian fluid formulation particularly suitable for fluid–structure interaction (FSI) simulation involving free-surface flows and light-weight structures. The technique combines the features of fractional step and quasi-incompressible approaches. The fractional momentum equation is modified so as to include an approximation for the current-step pressure using the assumption of quasi-incompressibility. The volumetric term in the tangent matrix is approximated allowing for the element-wise pressure condensation in the prediction step. The modified fractional momentum equation can be readily coupled with a structural code in a partitioned or monolithic fashion. The use of the quasi-incompressible prediction ensures convergent fluid–structure solution even for challenging cases when the densities of the fluid and the structure are similar. Once the prediction was obtained, the pressure Poisson equation and momentum correction equation are solved leading to a truly incompressible solution in the fluid domain except for the boundary where essential pressure boundary condition is prescribed. The paper concludes with two benchmark cases, highlighting the advantages of the method and comparing it with similar approaches proposed formerly.