Coventry City will groundshare at Birmingham City's St Andrew's for the 2019-20 season after failing to agree a deal to stay at the Ricoh Arena.
They had hoped to remain in Coventry but said the deadline for an agreement with Ricoh landlords Wasps has passed.
A club statement said a groundshare was necessary for Coventry to retain their place in the English Football League.
"We know full well that this is a very sad day for Coventry City and Sky Blues supporters," the statement added.
"This decision was our last resort and was made to ensure the club can fulfil its fixtures next season.
"We are incredibly disappointed and extremely frustrated that continuing differences between our owners Sisu and Wasps, and also Coventry City Council, could not be set aside to allow for a deal to play the club's home games at the Ricoh Arena.
"The Ricoh Arena is the stadium built to be the football club's home, and our fans should be able to watch their team play in the city that we are proud to represent.
"However, in order for a deal to be agreed between landlord and tenant, the conditions for the deal need to be deliverable by the tenant. What the landlord requested of CCFC's owners and ultimately, the club, was simply not deliverable."
How did we reach this point?
Coventry City's owners Sisu are in dispute with the city council over the 2014 sale of the Ricoh Arena to Premiership rugby union side Wasps.
Sisu claim the Ricoh was undervalued by £28m and they have been appealing against the decision not to allow a judicial review into the sale.
After losing their Supreme Court appeal in April, they took their complaint to the European Commission, with Coventry later saying the dispute is only with Coventry City Council and does not involve Wasps.
However, the move prompted Wasps, who had asked Sisu to cease all legal proceedings, to suggest that the "conditions" for discussions had "not been met", stating "the ball is back in the court" of Coventry's owners.
Having been threatened with expulsion from the EFL if they did not resolve the issue, Coventry subsequently looked at other options and have now come to an agreement with Birmingham for the 2019-20 season.
Blues have 'every sympathy' for Coventry
The EFL said the league had "reluctantly agreed" to the groundshare despite being placed in an "unenviable position" after previously suggesting Coventry needed to find a solution in their hometown.
"This is a decision that has not been taken lightly and it is regrettable that the parties involved have been unable to find a suitable and sensible solution," said the EFL statement.
"The EFL board calls on all parties to resolve this matter at the earliest convenience for the benefit of the city of Coventry, the club and people living in the local community.
"The EFL remains firmly of the view that its member clubs should play in the towns and cities from which they take their name.
"A number of conditions have been placed on the club to ensure progress is made in regard to finding a solution to getting the club back playing in Coventry at the earliest opportunity including the payment of a £1m bond and a quarterly review in order for the board to be updated on developments ahead of season 2020-21."
Coventry previously shared Northampton Town's Sixfields Stadium during the 2013-14 season before agreeing a return to the Ricoh in August 2014.
A Birmingham City statement said the club had "every sympathy" for the plight of Coventry and their supporters.
The Blues' statement added: "We always felt it important to try and help and support our neighbours, as part of the wider footballing family in this region, however we could."
Wasps 'entered talks in good faith'
In their own statement, Wasps described the situation as "frustrating" and "damaging to the city as a whole".
"Despite significant progress being made in the discussions, we have unfortunately been unable to reach an agreement with the owners which, putting aside the complaint to the European Commission, would deliver the fundamental principle that there would be no further proceedings about the ownership of the Ricoh Arena," said the rugby club's chief executive Nick Eastwood.
"We have talked to Coventry City supporters' groups to underline our position and our desire to keep the club at the Ricoh Arena.
"We would be prepared to continue discussions at any time if the owners are prepared to agree to the principle on which we began these discussions.
"The club wanted to stay at Ricoh Arena, we wanted them to remain here and all supporters' groups wanted to secure their future here. This is a very sad day for Coventry."