The pitch near to the River Severn has flooded regularly

The club can now raise money for a new stadium at Oteley Road on the edge of the town by selling the Gay Meadow site to developers.

The covenant has been transferred to the proposed new ground following a meeting of Shrewsbury and Atcham Borough Council on Monday evening.

It relates to provision for leisure use in a specific area.

Last month councillors approved plans to demolish Gay Meadow and build more than 150 new homes there, but the issue over the covenant has only now been resolved.

Shrewsbury have just appointed Gary Peters as their new manager

Jennings Homes have been planning to redevelop the site.

The Environment Agency have expressed concerns that people may not be able to reach their houses as the current pitch near to the River Severn floods regularly.

The club also revealed the identity of their new manager on Monday, the former Preston and Exeter boss Gary Peters.

He has taken charge of a side who are third from bottom in the table in League Two and were knocked out of the FA Cup by non-league club Histon at the weekend.

Mr Peters succeeds Jimmy Quinn, who guided Shrewsbury to promotion back into the Football League last season, when they beat Aldershot in a penalty shoot out in the Conference play-off final.