Reports suggest former Bayern Munich boss Hansi Flick is set to replace him.
Xavi will lead Barcelona for the final time on Sunday against Sevilla in their last La Liga match of the season.
The 44-year-old, who was under contract until 2025, was informed of the club’s decision in a meeting with President Joan Laporta and Sporting Director Deco on Friday.
Xavi had previously announced in January that he would leave the Camp Nou but was convinced to stay by Laporta in April.
Recent comments from Xavi about the club’s financial struggles reportedly angered Laporta.
Barcelona thanked Xavi for his work as a coach since taking charge in 2021.
The club stated that a “new structure” will be confirmed in the coming days, with Flick expected to take charge.
Flick, 59, has been out of work since being sacked by Germany in September 2023. He led Bayern Munich to the treble in 2020, winning the Bundesliga, DFB-Pokal, and Champions League.
Barcelona forward Robert Lewandowski played under Flick at Bayern for two seasons.
Xavi started his coaching career in 2019 after retirement, managing Al Sadd in Qatar, where he won seven titles in less than three years. He became Barcelona’s manager in November 2021 and won the 2022–23 Supercopa de España and La Liga title in his first full season.