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, the City administrators' "preferred biffer", 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)."
Football League chairman Greg Clarke said: "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."
ACL issued an official statement saying they were still keen to explore the possibility of keeping the club in the city and it read: "Like all Sky Blues fans, we want Coventry City Football Club playing in Coventry.
"We have repeatedly said that we are happy to discuss terms to allow the Sky Blues to continue playing at the Ricoh Arena - and have even offered to allow them to play for free while the club remains in administration. This offer was made a month ago and we still have not had a response.
"We are therefore deeply disappointed at the Football League's decision to allow the club to leave the city for three years. We understand that they are under considerable pressure to finalise the fixtures before the start of the season and that they are being placed in a very awkward position by both the administrator and the current preferred bidders, Otium Entertainment.
"There is no need to force fans to travel 30 miles to watch a 'home game'. The Ricoh Arena is available to them. We want them here. The fans want them here. The only people who want the Sky Blues to leave Coventry are the ones with no connection to this city."