Xavi's previous contract ran until 2014 but Barcelona sought to secure the long-term future of the 33-year-old, who has played such a key role in their extensive success over recent seasons.
The Spain international formally signed his new deal on Monday afternoon in the presence of president Sandro Rosell, vice-president Josep Maria Bartomeu and sporting director Andoni Zubizarreta.
Barcelona announced in December that Xavi, Carles Puyol and Lionel Messi had all agreed contract extensions with the Catalan club.
Puyol has also made his agreement formal, joining Xavi in signing on until 2016, while Messi will soon put his signature to a contract until 2018.
All three players emerged from the club's famous academy at La Masia, with Xavi the first to make the breakthrough into the senior side in 1998.
Football's most prolific passer has been central to Barcelona's success in becoming European football's most revered club, winning six Liga titles, two Copa del Reys and three Champions Leagues during his time at Barca.