The Sky Blues were 10th in npower League One, five points off the play-off places, but their promotion hopes for this term have now been extinguished having dropped to 14th place.
Coventry do, however, have one week in which to appeal the decision.
A statement released on Thursday afternoon read: "The Football League can confirm that Coventry City Football Club have been deducted 10 points, in accordance with its rules and regulations.
"This sporting sanction has been implemented with immediate effect. Coventry City have seven days in which to appeal.
"The League has now begun discussions with the administrator aimed at achieving a sustainable future for the club within The Football League."
Earlier in the day, the Sky Blues reached a short-term agreement to play their three remaining home games this season at the Ricoh Arena.
Amid an ongoing row between the club and Arena Coventry Limited (ACL), who manage the stadium and claim to be owed over £1.3million in unpaid rent stretching back 12 months, City last week placed a non-operating subsidiary of the club into administration.
But a statement released on Thursday morning read: "Coventry City Football Club Holdings Ltd are pleased that an agreement has been reached with ACL and the administrator that enables us to play our last three remaining home matches at the Ricoh Arena."
That non-operating subsidiary, Coventry City Football Club Limited, held the lease and licence for the Ricoh Arena, covering permission to play home matches at the stadium as well as the rental of the club shop and offices, which have already been emptied, with all staff having moved to their Ryton training ground.
- Sports & Recreation
- Coventry City Football Club