The generation of residual stresses by grinding process on the surface for a soft material result in poor performance and diminished life. Ball end magnetorheological finishing (BEMRF) process is a recently developed process that is effectively used for fine figuring and polishing of a variety of magnetic and non-magnetic materials. In this paper, grinding-induced residual stresses are addressed, and an attempt is made to relieve these residual stresses while achieving high surface finish using chemical assisted ball end magnetorheological finishing (CA-BEMRF) process. The chemical used in the present work is applied first time in BEMRF process and aluminium 7075 alloy workpiece has not been finished with this novel finishing process. The impact of various CA-BEMRF variables on percentage surface roughness reduction and percentage reduction in residual stresses are discussed statistically and graphically. Residual stresses of workpiece surfaces have been measured by using portable x-ray residual stress analyzer. Scanning electron microscopy (SEM) and atomic force microscopy (AFM) of the finished workpiece before and after CA-BEMRF process is carried out to assess the effects of magnetizing current, tool rotation and working gap on surface topography of machined surface. It has been observed that reduction in residual stress is achieved along with high surface finish on aluminium workpiece surface using CA-BEMRF technique. Significant process parameters affecting the residual stresses and surface roughness during polishing of workpiece are obtained using Analysis of variance (ANOVA) and F-test. The optimization problem for maximum percentage reduction in surface roughness and maximum percentage reduction in residual stress is formulated as multi objective, multi variable, nonlinear optimization problem. Maximum percentage surface roughness reduction and minimum residual stress has been found at magnetizing current 2.3 A, rotational speed of tool 550 rpm and working gap of 0.5 mm. Confirmatory experimental tests have been conducted and results obtained were found very close to the predicted outcome.