Councillors have given outline planning permission for housing to be built on Exeter's County Ground stadium.
The club has been at the County Ground for more than 120 years
Exeter Rugby Club is relying on the development of the site in St Thomas to fund a move to a new multi-million pound stadium at Sandy Park Farm.
More than 85 people had objected to the plans, fearing traffic congestion and over-development.
But councillors agreed to the principle of housing at the site that has been the club's home for over 120 years.
The plans drawn up by the rugby club include up to 147 homes on the site, but the developer will now have to produce a full planning application.
For the scheme to go ahead, the club must also satisfy Sport England that the loss of the playing field will be compensated for by the provision of extra facilities at the new stadium.
Council planners gave permission for the building of the new stadium off the M5 near Sandygate last month.
The County Ground also plays host to the city's speedway team, the Exeter Falcons, but they have already made plans to move to a new venue, also near the M5, for the start of the 2005 season in March.