The Spaniard came through the academy system at the Catalan club, progressing through the various age groups before making his first-team debut in 2021.
Nico had a productive 2021-22 campaign at Camp Nou, featuring on 37 occasions in all competitions, with 27 of those appearances coming in Spain's top flight.
Xavi was allegedly also keen to have the midfielder in his first-team squad this season, but Nico expressed a desire to move elsewhere in order to secure regular starts.
Valencia beat a number of clubs to his signature on loan, and the six-time Spain Under-21s international has made 14 appearances for the strugglers during the current season.
The midfielder has had a frustrating campaign due to a recent toe injury, but he made his return to action in Saturday evening's La Liga clash with Osasuna.
Nico came off the bench in the 72nd minute of the contest at Mestalla and helped Ruben Baraja's side secure a 1-0 victory, which moved them out of the relegation zone and into 16th in the table.
According to SPORT, Barcelona will be monitoring the midfielder's performances for the remainder of the season, but Xavi's plan is to have him back at Camp Nou this summer.
The report claims that the Barcelona head coach is a huge admirer of Nico, viewing him as a player capable of playing an important role for the La Liga leaders next season.
Barcelona captain Sergio Busquets only has a deal with the Catalan outfit until the end of the season, and Inter Miami are believed to be leading the race to bring him to the MLS.
The club are currently being strongly linked with a move for Manchester City's Ilkay Gundogan, while Villarreal's Dani Parejo is also believed to be a target this summer, with both players potentially available on free transfers.
However, Barcelona's financial problems might prevent them from being overly active in the upcoming market, which could create opportunities for players already contracted to the club.
Abde Ezzalzouli has also impressed on loan at Osasuna this season, contributing three goals and two assists in 22 appearances, and the 21-year-old could allegedly be part of the first team in 2022-23.
Barcelona will be bidding to re-open a nine-point lead at the top of the La Liga table when they head to Athletic Bilbao on Sunday night.