The accurate prediction of absolute protein-ligand binding free energies is one of the grand challenge problems of computational science. Binding free energy measures the strength of binding between a ligand and a protein, and an algorithm that would allow its accurate prediction would be a powerful tool for rational drug design. Here we present the development of a new method that allows for the absolute binding free energy of a protein-ligand complex to be calculated from first principles, using a single simulation. Our method involves the use of a novel reaction coordinate that swaps a ligand bound to a protein with an equivalent volume of bulk water. This water-swap reaction coordinate is built using an identity constraint, which identifies a cluster of water molecules from bulk water that occupies the same volume as the ligand in the protein active site. A dual topology algorithm is then used to swap the ligand from the active site with the identified water cluster from bulk water. The free energy is then calculated using replica exchange thermodynamic integration. This returns the free energy change of simultaneously transferring the ligand to bulk water, as an equivalent volume of bulk water is transferred back to the protein active site. This, directly, is the absolute binding free energy. It should be noted that while this reaction coordinate models the binding process directly, an accurate force field and sufficient sampling are still required to allow for the binding free energy to be predicted correctly. In this paper we present the details and development of this method, and demonstrate how the potential of mean force along the water-swap coordinate can be improved by calibrating the soft-core Coulomb and Lennard-Jones parameters used for the dual topology calculation. The optimal parameters were applied to calculations of protein-ligand binding free energies of a neuraminidase inhibitor (oseltamivir), with these results compared to experiment. These results demonstrate that the water-swap coordinate provides a viable and potentially powerful new route for the prediction of protein-ligand binding free energies.