Xavi will step down as Barcelona's head coach at the end of the season.
He announced the decision after Barcelona fell 5-3 at home to Villarreal, surrendering twice in extra time at the Nou Camp.
The loss puts them 10 points behind LaLiga leaders Real Madrid. Girona is also ahead of them in second, with 52 points.
"I want to announce that on June 30 I will no longer continue as the coach at Barca," Xavi said in a statement.
"I think the situation needs to change course, and as a culer, I cannot allow the current situation."
Xavi stated that he made the decision'several days ago,' and that while the difficult defeat to Villarreal provided the stage for him to declare it, he 'would have made' it sooner.
He expressed his hope that this choice would alleviate the stress and tension that his team is experiencing.
Semra Hunter, a Spanish football expert and Sky Sports News guest, commented on Xavi's departure: "It's honestly a bit bonkers to think how a coach who won a league and a Super Cup in 2.5 years with a mediocre squad at a club in financial ruin and institutional disarray can be driven from his post because of the immense pressure, scrutiny, and demands to be competitive and win."
Xavi's tenure will finish in less than three years, having been hired manager of his old club, where he won 25 major championships, in November 2021.
The renowned midfielder took over for Ronald Koeman, having only previously played in Qatar with Al Sadd. He had a contract that ran until the end of the next season.
Last season, Xavi guided Barcelona to the Supercopa de Espana and LaLiga crowns, his first full season and the first trophies since Lionel Messi left for PSG.
But Barcelona has struggled this season and has exhibited hints of impending collapse this month. They lost 4-1 to Real Madrid in the Spanish Super Cup in Saudi Arabia two weeks ago.
Barcelona was eliminated from the Copa del Rey on Thursday night, losing 4-2 to Athletic Bilbao in the quarterfinals.
Villarreal scored twice in stoppage time at the Estadi Olimpic Lluis Companys, putting additional pressure on Xavi after his team rallied from 2-0 down.
"Practically, I don't remember a match as cruel as today's," remarked Xavi, who has a contract until 2025.
"This match has been unfortunate and it is a time to change this dynamic."
During his career with Barcelona, the former Spain international and 2010 World Cup champion helped the club win eight LaLiga crowns and four Champions Leagues.
"I am not moved by economic matters, but by the heart," he remarked. "I think it's best for the club. I don't want to cause a problem for my favorite club.
"I don't want to be a problem, but a solution, and I think that between now and June I can still be a solution."
Barcelona's Champions League campaign will resume in February when they meet Napoli in the last 16, the first time they have reached that stage in three seasons.