The cash-strapped League One club have been embroiled in a long-running rent dispute with Ricoh Arena owners Arena Coventry Ltd, and both parties have been unable to resolve their differences.
Coventry were issued a winding-up order earlier this year and placed in administration after ACL took them to court claiming unpaid rent of £1.3m.
The Otium Entertainment Group, who are expected to finalise a deal with City administrators to buy the club, were forced to submit a bid to the Football League and Northampton Town to relocate to Sixfields.
The bid has now been approved, although it is subject to Otium paying a "performance bond" of £1m as an assurance that they will work to move the club back to Coventry as soon as possible.
A Football League statement read: "The board of directors of The Football League has reluctantly approved an application by Otium Entertainment Group - the Administrator's preferred bidder for Coventry City FC Limited - for Coventry City to play its home matches at Northampton Town's Sixfields Stadium for an initial period of three seasons.
"In the board's view, it was a matter of 'deep regret' that it had not proved possible for the club's proposed purchaser to reconcile its differences with the owners of the Ricoh Arena - Arena Coventry Limited (ACL).
"However, with the new season less than four weeks away, the board required certainty as to where the club would play its matches from the start of the new campaign.
"Nevertheless, the board's approval remains entirely conditional on the club ultimately exiting administration in accordance with The Football League's conditions and achieving a successful transfer of its league share.
"Otium will also be required to provide a performance bond of £1m with The Football League as an assurance of the club's commitment to return to the Coventry area.
Football League chairman Greg Clarke added: "The Football League believes that clubs should play in the towns and cities from which they take their name.
"Nonetheless, from time to time, the board is asked to consider temporary relocations as a means for securing a club's ongoing participation in our competition.
"With no prospect of an agreement being reached between Otium and ACL, the board was placed in an unenviable position - with the very real possibility of Coventry City being unable to fulfil its fixtures for next season.
"This would inevitably call into question the club's continued membership of The Football League.
"The board did not take this decision lightly and it remains a matter of deep regret that the two parties involved cannot come to an agreement.
"I urge both Otium and ACL to continue to explore every possible opportunity to resolve this dispute, for the good of the City of Coventry, its football club and people living in the local community."