Xavi Hernández will leave his role as Barcelona coach after Sunday's final game of the season, the club said in a statement Friday.
A source told ESPN that former Bayern Munich and Germany coach Hansi Flick is "on course" to replace him.
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Barcelona president Joan Laporta met with Xavi after Friday's training session to confirm the club's decision on a change of direction.
The move comes just one month after Xavi and Laporta announced in a joint news conference that the Catalan coach would fulfil his contract, which runs until 2025, despite having previously planned to step down this summer.
"Barcelona president Joan Laporta has communicated to Xavi Hernández that he will not continue as coach for the 2024-25 season," Barcelona said in a statement.
"The meeting took place at the training ground in the presence of vice president Rafa Yuste, sporting directors Deco and Xavi's assistants, Óscar Hernández and Sergio Alegre.
"Barcelona want to thank Xavi for his work as coach, which adds to his unmatchable career as a player and the captain of the first team, and wish him all the best in the future.
"Xavi will take charge of Sunday's game against Sevilla in what will be his final match as coach.
"In the coming days, Barcelona will reveal the new coaching structure for the first team staff."
Flick, 59, has been out of work since leaving the Germany job in 2023 but has impressed the Barça hierarchy in talks, with ESPN reporting this week he had emerged as the leading candidate to replace Xavi.
Barça B team coach Rafa Márquez and outgoing Bayern Munich boss Thomas Tuchel were also considered, but a source said negotiations with Flick's camp were now advanced.
Xavi announced in January he would step down at the end of the season, although he performed a U-turn in April, revealing he would stay and fulfil his contract. That decision was reached after a meeting with Laporta, but the Barça president has since changed his mind and decided to seek a change of direction.
Laporta was annoyed by remarks made by Xavi last week about the financial difficulties facing the club in the transfer market, although sources added the president has never been fully convinced by the former Spain international.
Sources repeatedly told ESPN this week that Xavi and his staff had not received any official information about his future, although they had suspected for a while that they were living out their last days at Barça.
It remains to be seen how Xavi will part ways with the club. He was previously willing to forgo the final year of his contract, but given the change in circumstances, sources have neither confirmed nor denied whether he will ask to be paid for the remaining year of his contract.
Xavi, who made over 700 appearances for Barça as a player, took over in 2021 and last season led the Blaugrana to a first LaLiga title since 2019.
"It is never easy to leave the club of your life, but I am very proud after two and a half years at the head of a dressing room that has been like a second family," Xavi said in a post on social media.
"From Sunday I will be another fan in the stands... Because before being a player or a coach I am a Barcelona fan and I only want the best for the club in my life, which will always have me at its disposal.
"This season things have not gone our way, but we have let it go and helped to grow a new generation of young footballers from La Masia who inspire all Barcelona fans... I wish the best for the club that I hold dear to my heart."
Meanwhile, Flick has long been admired by Laporta. In May 2021, ESPN revealed that Barça contacted Flick's camp to find out his availability but the then-Bayern coach had already committed to the Germany national team and the club therefore decided to keep Ronald Koeman.
The situation is different this time, with Flick out of work since being sacked by Germany in September 2023. Before managing Germany, Flick led Bayern to a Treble in 2020, beating Barça 8-2 en route to winning the Champions League.
A large part of his coaching career was previously spent working as assistant to Joachim Löw with the German national team, a role he held when Germany won the World Cup in 2014.