Classical molecular dynamics (MD), classical Monte Carlo (MC), and combined quantum mechanical/molecular mechanical (QM/MM) MD simulations were carried out to investigate the hydration structure of the Ni(II) ion in water using a newly constructed 2-body potential and a function correcting for 3-body effects. A 6-coordinate hydration structure with a maximum probability of the Ni-O distance at 2.25, 2.21, and 2.14 Angstrom was observed by the classical MD, classical MC, and QM/MM-MD simulation with 3-body corrections, respectively, while an 8-coordinate structure was observed by the classical MD and MC simulations using only 2-body pair potentials. The average structure parameters obtained by the Hertree-Fock level QM/MM-MD simulation are in agreement with the experimental values. The validity of the 3-body correction function is discussed on the basis of the results for the classical and QM/MM simulations. During the classical MD simulation, a water exchange reaction was observed for the 6-coordinate Ni(II) ion. The water exchange reaction proceeded via a 5-coordinate intermediate with the lifetime of ca. 2.5 ps. The observed dissociative mechanism of the water exchange reaction is in accordance with experimental evidence.