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Koeman, 58, was sacked by Barcelona on Wednesday after the Spanish club’s 1-0 defeat to Rayo Vallecano at the Estadio de Vallecas.
The Dutchman’s only major silverware as Barcelona manager came with last season’s Copa del Rey win during his 14 months in charge of the club.
Koeman leaves the Camp Nou with Barcelona currently ninth in La Liga, with the club six points adrift of league leaders Real Madrid.
“The president of the club, Joan Laporta, informed him [Koeman] of the decision after the defeat against Rayo Vallecano,” Barcelona said in a statement.
“Ronald Koeman will say goodbye to the squad on Thursday.”
Xavi, who is currently the manager of Qatari side Al Sadd, is widely tipped to return to the Camp Nou and replace Koeman as Barcelona manager.
The Barcelona legend has previously been linked with the Barcelona head coach role and has already been offered the position, according to reports in Spain.
Xavi has been in contact with Barcelona president Joan Laporta ahead of Koeman’s sacking and the La Liga club are preparing to trigger the Spaniard’s release clause in his Al Sadd contract.
The 41-year-old’s appointment is not expected to be made until Friday amid paperwork that Barcelona need to complete, but Xavi is already preparing to make changes upon his arrival.
According to Spanish reporter Gerard Romero, Xavi will adopt a 4-3-3 formation for Barcelona after playing in the system under Manchester City manager Pep Guardiola.
The Metro reports that the Al Sadd boss wants to strengthen his squad and identified Sterling as a potential target for Barcelona as part of his tactics.
Sterling has been linked with Barcelona in recent weeks and seen his minutes reduced under Guardiola, with the City winger open to the idea of playing abroad.
Joining the 26-year-old City star on Xavi’s radar is Sevilla centre-back Kounde, whose move to Chelsea in the summer was scuppered.
Xavi believes that the 22-year-old French defender, whose release clause is worth around £68.5m, will help strengthen Barcelona’s fragile defence.
City are expected to demand a hefty transfer fee for Sterling, while Chelsea’s £42.5m bid for Kounde was rejected.
Barcelona could struggle to meet the price tags of Sterling and Kounde amid the club handling a crippling debt standing at around £1bn.
Ousmane Dembele, who has been linked with Newcastle and Liverpool, is expected to be handed a new contract at Barcelona.
The 24-year-old French winger is out of contract next summer and is free to speak with foreign clubs in January, but Xavi is keen to keep hold of Dembele for his 4-3-3 formation at Barcelona.