Brain-computer interface (BCI) is one technology that allows a user to communicate with external devices through detecting brain activity. As a promising noninvasive technique, functional near-infrared spectroscopy (fNIRS) has recently earned increasing attention in BCI studies. However, in practice fNIRS measurements can suffer from significant physiological interference, for example, arising from cardiac contraction, breathing, and blood pressure fluctuations, thereby severely limiting the utility of the method. Here, we apply the multidistance fNIRS method, with short-distance and long-distance optode pairs, and we propose the combination of independent component analysis (ICA) and least squares (LS) with the fNIRS recordings to reduce the interference. The short-distance fNIRS measurement is treated as the virtual channel and the long-distance fNIRS measurement is treated as the measurement channel. Least squares is used to optimize the reconstruction value for brain activity signal. Monte Carlo simulations of photon propagation through a five-layered slab model of a human adult head were implemented to evaluate our methodology. The results demonstrate that the ICA method can separate the brain signal and interference; the further application of least squares can significantly recover haemodynamic signals contaminated by physiological interference from the fNIRS-evoked brain activity data.