The Barcelona midfielder expects an extremely stern test against a side "in stratospheric form" but believes the tie is on a knife-edge.
Die Roten warmed up for the tie with two consecutive 6-1 victories against Wolfsburg and Hannover in domestic competition, and Xavi admitted that he is under no illusions as to the size of the task facing the Blaugrana.
"Tuesday will be brutal," Xavi told TZ. "Munich is a city that lives for football. They have one of the most important stadiums in the world, but in the end, of course, we want to be playing in the grand final at Wembley."
By contrast, a much-changed Barcelona labored to a 1-0 win over Levante on Saturday, with a late Cesc Fabregas goal ensuring the Catalans retained a 13-point advantage over Real Madrid in La Liga.
Despite acknowledging the impressive form of their German counterparts, Xavi insists that Tuesday's clash remains on a knife-edge and will come down to the finest details.
"True, they are currently in a stratospheric form," the Spain midfielder said. "But in the Champions League the smallest details decide games. We will do everything we can to achieve a good result in Munich."