Arena Coventry Limited (ACL), who have been embroiled in a bitter rent row with the Sky Blues which has resulted in themagreeing a groundshare with Northampton for the 2013-14 season, proposed some changes to administrator Paul Appleton's original CVA on Tuesday.
That included an offer to the club to return to the Ricoh Arena on a greatly reduced rent with a 10-year lease, but the changes were not accepted by Appleton, resulting in ACL voting against allowing them to come out of administration.
Liquidation and a hefty points deduction look set to follow, with the club set to discuss their immediate future with the Football League.
A club statement read: "Coventry City Football Club Ltd likely to be liquidated following rejection of administrator's CVA proposal.
"It is with great regret that a proposed Company Voluntary Agreement has been rejected by Arena Coventry Limited.
"It means CCFC Ltd is likely to be put into liquidation which is expected to result in a points penalty for the club going into the new season.
"The football club and the Alan Higgs Centre Trust accepted the administrator's CVA, but the City Council, through ACL, have chosen to reject it - leading to possible liquidation and the risk of a 15-point deduction.
"The club will hold urgent meetings with the Football League to go through the next steps for the football club."
However, ACL have urged the administrators to come back with another proposed CVA.
"The board of ACL was informed that its amendments to the CVA were not accepted. They were therefore asked to vote on the proposals put forward by the administrator Paul Appleton," a statement from ACL read.
"ACL, jointly owned by the Alan Edward Higgs Charity and Coventry City Council, voted not to approve the administrator's proposals.
"This decision was based on ACL's twin aims: first, to keep Coventry City Football Club playing in Coventry; and second, to ensure that Coventry City Football Club is financially viable for the next few years and beyond.
"The conerns of all Sky Blues' supporters, and should be the central concerns of both The Football League and The Football Association.
"Mr Appleton has the ability to put forward new proposals, and we would welcome these as soon as possible."