This work reports Xantphos‐coordinated palladium dithiolate complexes as catalysts for decarboxylative Sonogashira coupling reaction of phenyl propiolic acid and 2‐butynoic acid with various iodoarenes. These palladium aryl dithiolate complexes were synthesized and characterized by 1H and 31P nuclear magnetic resonance (NMR) spectroscopy, melting point, and elemental analysis (CHNS). Synthetic utility for the reported protocol is explored for the effect of various functional groups on the yield of corresponding heteroaryl alkynes. The current protocol showed excellent catalytic activity towards decarboxylative alkynylation reaction with high turn‐over number (TON) up to 105 and turn‐over frequency (TOF) up to 104 h−1. The catalyst could be recycled up to six recycles without losing its catalytic activity. The in situ generation of palladium nanoparticles (PdNPs) was observed after the third recycle, and the amount was significant after the sixth recycle, which were confirmed and characterized by powder X‐ray diffraction (XRD), scanning electron microscope (SEM), and energy‐dispersive X‐ray (EDX) analysis and high‐resolution transmission electron microscopy (HR‐TEM). The catalytic activity of the reaction is attributed to the formation of PdNPs.