The government says it inducted the goalkeeper and midfielder into Spain's Royal Order of Sports Merit.
Casillas and Xavi were club rivals but friends off the pitch, and on Spain's national team.
Xavi left Barcelona for Qatar after 17 seasons, while Casillas moved to Portuguese club FC Porto last weekend.
The two players, who helped Spain win the 2010 World Cup among a slew of trophies for clubs and country, were awarded with the annual sports prize from Spain's Prince of Asturias Foundation in 2012.