The Spanish economy shrank by 0.1% in the last three months of 2009, making it the last major economy still in recession.
The contraction was not as severe as a decline of 0.3% in the third quarter.
The national statistics agency also said gross domestic product contracted by 3.1% compared with the same period a year before.
The BBC reports Europe's fifth-largest economy has the highest rate of unemployment in the eurozone: 19.5% in December.
For 2009 as a whole, the economy contracted by 3.6%.
The government announced a 50 billion euro austerity package, including a civil service hiring freeze, at the end of January.
Prime Minister Jose Luis Rodriguez Zapatero said on Wednesday that Spain was close to following other European nations out of recession.