The Spaniard's former deal was due to expire in 2014 but he has put pen to paper on a new contract which will see him stay at Barca for a further two years.
Barca confirmed the news on their official website on Monday afternoon.
Xavi is one of three key players who have recently agreed new contracts, with Lionel Messi and Carles Puyol also committing.
The 33-year-old came through the youth ranks at the Catalan club and has made over 600 appearances.
During his time at Barcelona he has won a host of trophies, including six Primera Division titles, three UEFA Champions Leagues, two FIFA Club World Cups and two Copa del Rey crowns.