From Sunday, UK nationals who have lived in the EU country for more than six months will no longer be able to use their DVLA-issued licences.
British residents will need to obtain a Spanish licence to get behind the wheel, and may need to retake a driving test until an agreement is reached.
The change will not affect holidaymakers visiting the country, who can still use their UK driving licence.
A UK Government source told the Mail on Sunday the situation was thought to be temporary, while the Foreign Office said it was pushing to ‘accelerate talks’ with the Spanish government.
‘This could go on for a week or it could be longer. It should be temporary but we don’t know how temporary,’ the source said.
A Foreign Office spokesperson said: ‘Despite the UK Government’s best efforts, an agreement to swap UK driving licences for Spanish licences has not yet been reached.
‘From May 1, UK licence holders who have been resident in Spain for more than six months and did not exchange their licence during the transition period will no longer be able to drive legally in Spain.
‘This does not affect visiting or tourist motorists from the UK or Gibraltar.
‘We have agreed to rapidly accelerate talks and are urging the Spanish government to bring forward interim measures.
‘We remain committed to reaching a deal and the UK already has similar arrangements in place with 24 other EU countries.’
Until now, British residents in Spain have been able to use their DVLA-issued licences to get around.
Conservative former leader Sir Iain Duncan Smith blamed Spain for the delay, telling the paper it was a case of ‘mañana, mañana’ and saying it was ‘time they do what they agreed’.
The DGT – the Spanish road transport authority – and Spain’s Ministry of Interior have been contacted for comment.