The newly promoted Spanish side called off talks to sign the Greek captain and blamed the failure of the negotiations on the player's agents.
Spanish club Levante said talks with the Greece captain, named player of the tournament at Euro 2004, are at an advanced stage.
Barcelona said on their website that the Porto playmaker would arrive in the city on Monday and would undergo a routine medical on Tuesday prior to signing the deal.
Real Madrid lost 1-0 at home to Real Mallorca in the King's Cup last-16 and went out of the tournament 3-1 on aggregate.
Samuel Eto'o scored two late goals for Barcelona in a 4-0 romp at home to promoted Real Murcia in the Primera Liga on Saturday.
Ruud van Nistelrooy has signed a one-year contract extension that keeps him with Real Madrid until 2010.
The Barcelona coach said he was not surprised Arsenal were such a hard nut to crack.
Dutch internationals Patrick Kluivert, Philip Cocu, Michael Reiziger and Marc Overmars are to leave The Spanish club.
Samuel Eto'o led Barcelona to only their second away win of the season in a 3-0 victory over Valencia.
Real Madrid charged seven points clear at the top of the Primera Liga after a 1-0 win at Athletic Bilbao.
Villarreal missed their chance to stay in touch with Real Madrid at the top of the Primera Liga when they went down 2-0 at Valladolid on Sunday. The defeat kept Manuel Pellegrini's side level with Barcelona on 28 points in third spot in the table and four adrift of leaders Real, who won 3-1 at home to Racing Santander on Saturday.
Espanyol put aside relegation worries to clinch a scintillating 4-1 win over favourites Real Zaragoza in the final.
The Argentine teenager has been out of action after he tore a thigh muscle during the Champions League match against Chelsea
Real Madrid failed to keep the pressure on leaders Barcelona as they were held to a draw by relegation-threatened Real Sociedad.
Leaders Real Madrid were held to a 1-1 draw away to promoted Real Murcia in the Primera Liga on Saturday, allowing arch-rivals Barcelona to close to within two points in the standings.
Real Madrid president is targeting seven high-profile coaches for the Spanish club
Barcelona's march towards the Primera Liga title slowed on Saturday after a goalless draw with bottom-placed side Malaga.
Real Madrid extended their lead at the top of the Primera Liga with an unconvincing 4-3 home victory over Real Mallorca at the Bernabeu on Sunday.
Getafe returned to haunt Barcelona as they condemned Frank Rijkaard's side to a 2-0 defeat in the Primera Liga on Saturday. The last time Barca visited the Coliseum six months ago Getafe knocked them out of the King's Cup in the semi-finals by overturning a 5-2 first-leg deficit with a stunning 4-0 win.
Sevilla earned a 2-0 home victory over leaders Real Madrid in a pulsating Primera Liga match.
The Catalans made a lethargic start and fell behind in the 16th minute when striker Joseba Llorente bundled the ball into the net but they salvaged a point when Ronaldinho equalised with a neat finish just before halftime.
Real Madrid scored two late goals to secure a 3-1 home win over Deportivo Coruna in the Spanish Primera Liga.
Villarreal are a point behind in second after overcoming Barcelona 3-1 at home, and were joined on 18 points by Valencia.
Ronaldinho was in inspirational form as he returned to lead Barcelona to a 5-1 home victory over an unfortunate Real Betis in the Primera Liga on Saturday.
Second-half strikes from Ruud van Nistelrooy and Gonzalo Higuain earned Real Madrid a 2-0 win at home to Recreativo Huelva.
Lionel Messi proved too hot to handle for Real Zaragoza as he inspired Barcelona to a 4-1 home victory with two goals in the Primera Liga.
A roundup of weekend action in the main European leagues.\n
Javier Saviola and Wesley Sneijder set up champions Real Madrid for a laboured 3-1 victory over 10-man Almeria in the Primera Liga on Saturday.
The Real Madrid striker will miss the club's King's Cup match against Athletic Bilbao
Real Madrid thrashed Villareal 5-0 while arch-rivals Barcelona beat Athletico Madrid 3-1 on Sunday.
Real Madrid earned a 2-1 comeback victory over city rivals Atletico.
Brazilian ace Ronaldo returned from injury to give Real Madrid a 1-0 victory in the Primera Liga.
The injury will require specialist treatment and he is likely to be sidelined for around two months.
Five-goal Valencia ended Real Madrid's short stay at the top of the Primera Liga on Sunday.
A 3-0 victory took Barcelona to the top of the Primera Liga.