Xavi played for Al Sadd for four years before taking over as manager
Xavi says he turned down the offer to manage his former club Barcelona last week because the opportunity came "too early" in his coaching career.
The former Spain midfielder has been Al Sadd's boss since his playing career ended with the Qatari club in May.
He said Barcelona chief executive Oscar Grau and sporting director Eric Abidal offered him the manager's job before sacking Ernesto Valverde on Monday.
The La Liga leaders instead appointed former Real Betis boss Quique Setien.
"I did not agree to this offer, especially as it is too early for me to coach Barcelona," said Xavi, 39.
"But it will still be my dream to coach the team in the future."
Xavi, who made more than 750 appearances for Barcelona between 1998 and 2015, added that he "loves" Setien.
"I love the way he works and I expect him to succeed with the team," he said.
- Why Valverde went, why Setien is next - Balague