Sanchez's socialist government said his two-day trip will end the "anomaly" of no Spanish leader having paid an official visit to the island since 1986, despite Spain being Cuba's second-biggest trading partner after Venezuela.
Other world leaders have visited Cuba in recent years, including U.S. President Barack Obama's historic 2016 trip that sought to thaw relations with Havana, with relations between the two countries then decliing under President Donald Trump.
The United States has maintained its decades-long economic blockade of Cuba, with Trump accusing Cuba with no evidence of a series of unexplained events that injured nearly 22 U.S. government officials in Cuba over the course of a year. Cuba has rejected those accusations.
Sanchez is due to meet with Cuban President Miguel Diaz-Canel but is not expected to hold talks with Raul Castro, who stepped down as president in April but still leads the ruling Communist Party.
Sanchez will host a breakfast gathering with Spanish business leaders and a forum, for which some 200 companies from both countries have registered, including telecoms giant Telefonica and Iberia airlines.
Spain is the main foreign investor in several sectors of the Cuban economy, including tourism and financial services. It hopes to increase its presence in tourism, renewable energy and infrastructure as the island opens up, the Spanish government said.
Sanchez is not expected to meet with political opponents, according to the Spanish government, but will hold talks with members of Cuba's civil society, including Cuban writer Leonardo Padura and designer Idania del Rio.