just had the same error. I searched the web a bit and it could be that you have not enough free space like me. I am running Home Assistant as a VM in Hyper-V and was able to enlarge the virtual disk and it was recognized and i could update afterwards.
You could check this with running the command “df -h” with “SSH & Web Terminal” Community Add-on. (You need to install the Add-on > Configure a password > open Terminal > type ‘login’ then ‘hassio’ then your password and then type ‘df -h’ and check free space.
The following Links may help solve if it’s free space problem: