The Premiership club cleared the last hurdle in the way of the project when the Government decided there was no need for a public inquiry.
Coventry will now take up various options to finance the pounds 120m scheme, which includes a state-of-the-art stadium with a retractable roof and a pitch which will slide out so that the venue can be used for other events such as pop concerts.
The site near the M6 in the Foleshill district of Coventry will have its own railway station and will include two superstore developments.
Coventry say they will play their first match in the new arena in August 2001. Their current home, Highfield Road, will be then sold.
Bryan Richardson, the Coventry chairman, said: "First and foremost we are a football club, but to compete in the Premiership we must generate more income. Wherever new stadiums have been built, either here or in Europe, attendances have doubled and sometimes trebled. Our stadium will have facilities unrivalled in Europe."
John McGuigan, Coventry City Council's development director, said: "This is a stunning development which will give Coventry people a feeling of pride. It will be a landmark which will signify to all motorists on the M6 that they are passing Coventry - a city with a future."
Manchester United could decide to make a move for Carlos Roa after the Argentinian international goalkeeper reached a stalemate in fresh contract talks with Real Mallorca.
United are believed to be interested in Roa as a replacement for Peter Schmeichel. The Dane has confirmed he will be quitting the club in the summer after eight seasons at Old Trafford.
Roa is apparently unhappy at Mallorca, even though the Spanish side are currently second in the Primera Liga and chasing the first title in the club's history.
Although contracted until 2001, the 28-year-old goalkeeper is looking for a final move to a European club with whom he would like to end his career by signing a three or four-year deal.
Several Italian Serie A sides, along with United, have been alerted by the impasse, which has been going on since October, with Roa and Mallorca unable to reach an agreement.
With frustration growing, Mallorca have apparently cut Roa's asking price in half to pounds 6.5m and are willing to listen to any offer in that region.
Roa's representative, Alejandro Camano, said: "We have not been able to reach a deal with regards to revising the conditions of Carlos' contract. From this point Mallorca has agreed that a serious offer for the player of around pounds 6.5m from any club will be considered."
Roa, who helped Argentina to a penalty shoot-out victory over England in the World Cup finals last summer, reckons it will be "mission impossible" to agree new terms with Mallorca.
He added: "The club has made an offer which is not acceptable."Reuse content