Club president Sandro Rosell confirmed on Friday that the 44-year-old will undergo further cancer treatment, making it "impossible for him to continue as coach"
Rumours emerged on Friday that the 44-year-old, who took over from Pep Guardiola prior to the 2012-13 season, was set to step down from his role after suffering another setback in his battle against ill-health.
Club president Sandro Rosell and director of football Andoni Zubizarreta called a press conference at Camp Nou on Friday evening, where they confirmed Vilanova must undergo further cancer treatment which would make it "impossible" for him to continue in his role.
"After looking at routine tests, there is [now] an option to continue treating his disease which means it will be impossible for him to continue as first-team coach of FC Barcelona," Rosell told reporters. "I want to ask for the maximum respect for him and his family.
"We have got together with all of the players and the coaching staff and we have decided not to play tomorrow in Poland [in a friendly against Lechia Gdansk].
"It is a very big blow, a huge blow. But Barcelona has overcome many obstacles in its history and this will be no exception."
The Barcelona squad, including Lionel Messi, were present in the front two rows of seats of the press conference as Rosell delivered the news.
Barca won 32 out of 38 league games under Vilanova in 2012-13, lifting the Primera Division title with a record-equalling points tally of 100, as well as reaching the semi-finals of the Champions League for a record sixth consecutive season.
Rosell also confirmed the club expect to announce his successor in the coming days.