Bristol Rovers said today that following a 're-appraisal' of the scheme, the club felt it could stay in Bristol and build a new stadium at the same time.
It means the players will not have to temporarily move to Cheltenham, and Bristol Rugby - who also play at the Memorial Stadium - will not have to play their home games in Wales.
In June Rovers put plans for a £35 million redevelopment of the Memorial Stadium on hold for a year.
Club directors took the decision after it emerged one of its main developers had pulled out because of the 'credit crunch'.
Opal Property Group, the Manchester-based developer, blamed the global credit crunch for its 11th-hour decision to pull out of the deal to build and manage the student accommodation attached to the stadium.
Work had been due to start over the summer.
The club said today: "Since we announced the delay in the stadium project in June we have been re-appraising the scheme. This is mainly in the light of the effects of the current credit crunch and the on- going financial climate.
"We are very pleased to announce that through the careful re-design and phasing of the construction of the project we will be able to stay at the Memorial Stadium throughout the construction process.
"To allow this to happen we have redesigned the foundations, steel frame and pre-cast concrete frame to accommodate the phasing of the construction.
"During the works we will maintain a minimum capacity of 8,500 at all times, and within certain phases, that will increase to over 10,000.
"We will be able to maintain the majority of the corporate and spectator facilities during phase one and replacement facilities will come on line during phase two.
"This approach will retain much needed income for the club during construction and accommodate our corporate partners and fans on match days.
"Bristol Rugby have been made aware of these proposals."