Coventry, who moved into the brand new 32,000-seater stadium in 2005 after more than 100 years at Highfield Road, have played 34 miles away in Northampton since August 2013 because of a financial row between the club and the owners of the stadium Arena Coventry Limited (ACL).
The club's owners Sisu agreed a financial settlement with ACL to end the dispute over unpaid rent at the stadium, which has continued to operate as a music and business venue.
"We are delighted to get this deal done and I am sure every supporter of Coventry City will be thrilled with this news," Steve Waggott, development director at Coventry City FC, said.
"We are under no illusion what a difficult 12 months it has been for the supporters and that was uppermost in our thinking as we worked to get this deal done.
"There has had to be compromise on both sides and the commercial details of the deal will remain confidential."
Coventry, whose 34-year stay in the English top flight ended in 2001, said they had agreed a two-year deal to return to the stadium with an option for another two years.
Their first game back on home turf will be against Gillingham on Sept 6.
(Reporting by Martyn Herman. Editing by Patrick Johnston)
