The fate of many surface processes is determined by the competition between externally driven dynamics and intrinsic substrate-induced relaxation. In this work, we use the reduced density matrix theory to simulate the dynamics of STM-induced atom transfer between a metal surface and the STM tip, which can be considered as an activated barrier crossing process. Our model describes the vibrational excitation as a result of temporary occupation of a negative ion resonance by a tunnelling electron. The vibrational relaxation due to substrate phonons or electron-hole pairs is characterized in the framework of the Redfield theory. The results are consistent with experimental observations.