The Ricoh Arena is no longer suing Northampton Town for ground-sharing with Coventry City.
In July, stadium bosses announced they were planning legal action against The Cobblers for effectively 'stealing' their customer.
The Sky Blues currently play at the Sixfields Stadium in Northampton and have signed a deal to stay there for at least three years.
This evening the Ricoh has confirmed it has dropped the claim 'so as to avoid any further distress to [Northampton] fans and to help clarify the position for long suffering Sky Blues supporters.'
"We still believe our action against Northampton Town Football Club has strong legal merit.
"In light however of the Football League's decision to award the Golden Share to Otium Entertainment and the recent public statement made by Joy Seppala... it has become clear that even successful legal action will not bring the Club home from Northampton.
"We await Otium's best offer to return but to date we have heard nothing from them.
"Our focus remains on running our successful business."
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Just 1,100 fans travelled to Northampton's Sixfields stadium for the Sky Blues' first 'home' game at their new base.
There were protests outside by angry fans demanding the team be kept in their home city.
Meanwhile, around six times that many headed to the Ricoh Arena for a legends match in celebration of the club's 130th anniversary.
Andy Bevan reports.
Fans at a charity legends match at the Ricoh Arena have sung official Sky Blues song Let's All Sing Together to the sound of a brass band.
The match is being held to herald Coventry City's 130th anniversary.
Angry football fans have staged a protest outside Coventry City's new 'home' ground in Northampton.
Fans have packed into the stands of Coventry's Ricoh Arena for a legends match in honour of the club's 130th anniversary.
The game was expected to attract thousands of fans boycotting the team's first 'home' game at Northampton's Sixfields stadium.
Coventry City will play a home match outside the city today, for the first time in the club's 130 year history.
The Sky Blues have moved to Northampton Town's Sixfields Stadium for at least three years.
It follows a long-running rent row with the Ricoh Arena, which saw the club fall into administration.
Around 500 Coventry fans are expected to go the match.
Meanwhile, thousands of supporters will instead be at another game happening at the same time.
A legends match has been organised at the Ricoh Arena, to celebrate the club's 130th anniversary.