The decision to remove Valverde was confirmed following a board meeting that lasted more than four hours at Camp Nou on Monday afternoon.
Barca are top of La Liga but have won only one of their last five matches. Valverde is the first coach the club has sacked mid-season since Louis van Gaal in 2003.
“FC Barcelona and Ernesto Valverde have reached an agreement to terminate the contract that united both parties,” read a club statement released on Monday night.
Setien will be presented in a press conference at Camp Nou at 2.30pm local time (1330 GMT) on Tuesday
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