"The signing of the contract will take place in the next few days," the club said in a statement posted on its website.
The 40-year-old, who spent most of his playing career at Barcelona, coached Barcelona's B team before taking control of the first-team squad in June 2008 from Dutchman Frank Rijkaard.
The former Spanish international playmaker won seven trophies in his first two seasons at the Camp Nou.
He had a remarkable debut season winning the Champions League, league title and Spanish Cup.
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