The former midfielder had previously stated he would leave the Catalan outfit at the end of the season.
That was in January, before Xavi made a U-turn on that decision just last month after a strong run of form.
Since then, rumours have been rife that Barcelona have been in the market for a new manager.
According to Fabrizio Romano, ex-Germany and Bayern Munich boss Hansi Flick is set to take the reins at Barça this summer.
Barcelona issued a statement shortly after midday on Friday. "(Club) president Joan Laporta has informed Xavi Hernández that he will not be continuing as first team coach in the 2024/25 season," it said.
"The meeting happened at the Ciutat Esportiva Joan Gamper and was also attended by sporting vice-president Rafa Yuste, director of sport Anderson Luís de Souza, Deco, Xavi, Òscar Hernández and Sergio Alegre.
"Barcelona wishes to thank Xavi for his work as coach, as well as for his inimitable career as a player and as team captain, and wishes him every future success in the world.
"Xavi Hernández will be coaching the team for the last time in Sunday's game away to Sevilla.
"During the course of the next few days, Barcelona will be making an announcement regarding the new first team structure."
Barcelona were crowned champions of the Spanish top flight last term, but were unable to defend the title in the current season.
They were beaten in the Champions League quarter-finals by PSG, battered 4-1 by Real Madrid in the Spanish Super Cup and lost to Athletic Bilbao in the Copa del Rey.
