The club are expected to make an announcement next week.
Xavi replaced Ronald Koeman as Barcelona manager in November 2021.
The Catalans were languishing in ninth position, but the Spaniard ultimately guided them to a second-place finish.
They also won the Spanish Super Cup as Xavi bagged two trophies in his first full season as Barca boss.
The 43-year-old’s current contract at Camp Nou will expire next year, but the club are keen to retain his services beyond that period.
The 43-year-old will be rewarded with a significant salary increase.
The latest news will be music to the ears of Barca fans who want the Spaniard to be their manager for the long-term.
Barca will aim to defend their league crown in 2023-24, but he will likely face a tough challenge from Madrid, who have won all four matches this term.
Barcelona suffered a disappointing goalless draw at Getafe in their opening match but bounced back strongly to win their subsequent three games.
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