The free boundary of the seepage flow is a problem of close consideration in engineering. So far, an estimation of the wet set region usually needs a priori before the numerical analysis, and the configuration of the free boundary is then obtained by successive approximation. The authors of this paper benefit from a new mathematical expression—The Variational Inequality—to formulate the free boundary problem, which is then solved by the finite element method. Instead of the conventional way of discretization, here the finite element mesh is generated in the entire domain of the studied media and the free boundary of the seepage region can be defined directly without any process of iteration. The investigation gives a new effective scheme for the seepage flow analysis.