The 41-year-old former Spain international will replace Ronald Koeman, who was dismissed as Barcelona manager last week.
Xavi had been Al Sadd manager since retiring from football in 2019, having spent the last four years of his playing career at the club.
"FC Barcelona have reached an agreement with Xavi Hernandez for him to become first team coach for the rest of the current season and two more seasons," a Barcelona statement said.
"Xavi Hernandez, a youth team product at Barca, has left his current club, Al Sadd of Qatar, after talks held over the last few days with the owners of the club.
"It is expected that Xavi Hernandez will arrive in Barcelona this weekend and that on Monday 8 November his presentation as new FC Barcelona first team coach will take place in an event open to the public at Camp Nou.
"After the event Xavi Hernandez will appear in a press conference in the Ricard Maxenchs press room."
Xavi led Al Sadd to win the Qatar Stars League in the 2020/2021 season. Xavi won seven trophies as manager of Al Sadd in total.
Xavi won eight La Liga titles, four Champions League trophies, three Copa del Reys among other honours during his time as a player at Barcelona.
He also won two European Championships and the 2010 FIFA World Cup with Spain.
Barcelona are ninth on the La Liga table with just four wins from their opening eleven matches.
