This paper addresses the problem of friction-free contact between two elastic bodies. We develop an augmented Lagrangian method that provides computational convenience by reformulating the contact problem as a nonlinear variational equality. To achieve this, we propose a Nitsche-based method incorporating a hybrid displacement variable defined on an interstitial layer. This approach enables complete decoupling of the contact domains, with interaction occurring exclusively through the interstitial layer. The layer is independently approximated, eliminating the need to handle intersections between unrelated meshes. Additionally, the method supports introducing an independent model on the interface, which we leverage to represent a membrane covering one of the bodies. We present the formulation of the method, establish stability and error estimates, and demonstrate its practical utility through illustrative numerical examples.

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