Xavi admits he was tempted by Barcelona's offer to take over from Ernesto Valverde, but said the opportunity came "too soon" in his short coaching career.
The former midfielder left the Catalan club in 2015 and has only been in charge at Qatari side Al Sadd since the summer, but he was offered the coaching role at Camp Nou by Barca CEO Oscar Grau and sporting director Eric Abidal in talks last weekend.
When the negotiations became public knowledge, Barca continued their search and eventually replaced Valverde with Quique Setien on a two-and-a-half-year contract.
Speaking ahead of Al Sadd's Qatar Cup Final against Al Duhail on Friday, Xavi admitted he had turned down an offer from the Blaugrana.
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"Yes, I received an offer from Barcelona in the presence of Eric Abidal and Oscar Grau here in Doha but I did not accept it, especially because it's too soon for me to coach Barcelona," he said.
"But it will continue to be a dream of mine in the future to manage Barca."
The World Cup winner admitted there had been some soul-searching after he had turned down the position and seen the opportunity pass him by.
"First I told my family and then the players because they had been monitoring the situation," he said. "For the past three days I wasn't in the best position but now I'm fully focused on Al Sadd."
And on Setien, he said: "I love Barca's new coach, love the way he works and I hope he has success with the team."
