Hafnium oxide (HfO2) is a leading candidate to replace silicon oxide as the gate dielectric for future generation metal-oxide-semiconductor based nanoelectronic devices. Atomic layer deposition (ALD) has recently gained interest because of its suitability for fabrication of conformal films with thicknesses in the nanometer range. This study uses periodic density functional theory (DFT) to investigate the mechanisms of both half-reactions occurring on the growing surface during the ALD of HfO2 using HfCl4 and water as precursors. We find that the adsorption energy and the preferred site of adsorption of the metal precursor are strong functions of the water coverage. As water coverage increases, the metal precursor preferentially interacts with multiple surface adsorption sites. During the water pulse the removal of Cl can be facilitated by either a ligand exchange reaction or the dissociation of Cl upon increase in coordination of the Hf atom of the precursor. Our predicted potential energy surface indicates that a more likely mechanism is hydration of the adsorbed Hf complex up to a coordination number of 7, followed by the dissociation of a chloride ion that is stabilized by solvation. Born-Oppenheimer molecular dynamics (BOMD) simulations of an adsorbed metal precursor in the presence of a multilayer of water shows that Cl dissociation is facile if sufficient water molecules are present to solvate the Cl(-) anions. Hence, solvation plays a crucial role during the water pulse and provides an alternative explanation for why ALD growth rates for this system decrease at high temperatures.