You'll get this error when you try to download a game and your hard drive doesn't have enough free space to install it. Free up some space on your hard drive to clear this error.
Visit these articles for steps to free up space on your hard drive:
If you're still short on space and/or you have more than one hard drive, you can try installing the game on a different hard drive that may have more free space.
You can change the download location after you click Install on any game in your Library by clicking Browse:
You can find out how much free space you have on your hard drive by following these steps:
Note: Scroll down to More storage settings, and then click View storage usage on other drives to see additional storage disks if you have any.