The Cassidy Group - the international property development firm based in Meriden - has announced it will end its shirt sponsorship deal with the club when the season finishes in May to allow for a national sponsor to take over.
The company, owned by City supporters Patric and James Cassidy, remains a big supporter of local sport and has been the club's main sponsor for five seasons.
But now it has decided not to renew the deal to allow the club to seek a new backer.
James Cassidy said: "Cassidy Group are committed to helping improve sports within the city, and a successful football club is a key component of that.
"Five years ago the club was in severe financial difficulties and we were proud to help in what was their darkest hour. Under new management the club has come a long way and are now in a position to attract a national sponsor. Both Patric and I, and our families, are proud to have played a part in that.
"It has and continues to be a really good relationship. We will still be very visible at the Ricoh Arena and are very keen to see the club thrive, but we feel it is now in a position where it can pursue new avenues.
"We will follow the progress of the club very closely - and look forward to the day it returns to the Premier League!"
The Sky Blues say an announcement will be made in the near future regarding the club's shirt sponsorship.
Commercial director Nathan Kosky said: "Everyone at the club would like to thank the Cassidy Group for its support.
"It has backed Coventry City during some testing times, and that support was vital to the continuation of the club - something which is appreciated by everyone connected to the Sky Blues.
"We are now in a position to attract a front line sponsor, the Cassidy Group recognises that, and we expect to announce a new deal very soon."