To address the problem of deformation control of a new foundation pit in finite space, a mechanical model of strong mutual clamping in finite space considering stress release is developed based on the plane strain method of elastic mechanics by combining theoretical analysis, numerical deduction, and engineering practice. The formation damage factor is introduced to distinguish the structural failure state of the formation, and the functional relationship between the clamping stress and the formation damage factor is obtained. A numerical deduction model of the stress barrier in finite space is constructed. The influence of stress release holes on the stress structure of finite space is examined, and an integrated structural control method for deformation support and stress barrier is proposed. The effectiveness of the method was validated by the engineering practice base project of the University of Science and Technology Beijing. The findings reveal that under the strong mutual clamping effect between the lateral earth pressure of the existing building and the supporting reaction force of the foundation pit, the formation damage factor has a linear negative correlation with clamping stress. The vertical stress in the shallow part of the model without a pressure relief hole increases gradually and then decreases and sets near 21.2–22.5 kPa. The vertical stress level of the model with a pressure relief hole is ～40 kPa lower than that of the model without a pressure relief hole. The horizontal stress of the shallow layer without the pressure relief hole first increases, then decreases, and gradually increases to a maximum value of 94.72 kPa in the early stage of foundation pit excavation. The peak value of horizontal stress is lowered by 65.51%, and the effective release of formation stress is 43.55%–65.51%. The settlement of the foundation pit increases gradually with increasing excavation time. The maximum horizontal deformation of the model with a pressure relief hole is 15.86 mm lower than that of the model without a pressure relief hole, and the vertical deformation is reduced by 39.53%. The effective control rate of formation deformation is 33.48%–58.72%. The horizontal deformation control rate of the deformation support–stress barrier integrated structure support method is 28.57%–37.91%, and the ground settlement deformation control rate is 36.86%–54.26%, which confirms the effectiveness of the method. This work offers data support for the stability control of foundation pits in limited space.