City were taken to court to face an administration order from their Ricoh Arena landlords, Arena Coventry Ltd, over a year's unpaid rent of £1.3m. The deduction means the Sky Blues, who have seven days to appeal against the decision, slip from 10th to 14th in the table.
In a statement, Coventry said they were "disappointed by the decision" but added that they "understand the Football League's course of action in accordance with its rules and regulations.
It continued: "We welcome the offer for further dialogue which we hope to commence at the earliest available opportunity.
"Coventry City Football Club has the right to appeal the decision within seven days and discussions have already started with regards to the club's next official course of action."
The news is the culmination of a series of events which began a week ago, when it was announced that Coventry City Football Club Ltd, the non-operating subsidiary company that held the lease and licence for the Ricoh Arena, was to go into administration.
Sisu, the consortium which owns the Sky Blues, argued that the company did not hold any assets or staff of its own.
However the court decided that the subsidiary owns the Golden Share, which guarantees membership of the Football League.
The Football League have therefore responded by taking the 10 points away from the Sky Blues.
The move all but ends Coventry's hopes of making the play-offs - they are now 15 points behind sixth-placed Sheffield United with only six games remaining.
But they appear to be safe from any danger of relegation - 21st placed Scunthorpe are 12 points behind Steven Pressley's side.
Despite their financial state, the Sky Blues have been attracting interest from United States-based property tycoon Preston Haskell IV, who recently visited Coventry to analyse the club first-hand.