Academy Director Steve Ogrizovic believes the decision to streamline the youth set-up signals the way forward for the club.
The Sky Blues Under-19 team will be disbanded leaving just the Under-17 side.
The decison pre-empts an overhaul scheduled for the academy system nationally.
From 2004/05 clubs will run an under-18 group rather than the two representative sides at present.
"It’s been a difficult season. We’ve got a lot of professionals on the books and like the first team, we’ve had to make decisions on players and make settlements with a number of them.
"This will undoubtedly benefit the future of the Academy and the Under-17s will get a great chance to gel as a team before the introduction of an Under-18 league the following season,” said Ogrizovic.
Those retained from the present Under-19 side will form the nucleus of a youthful reserve team next season.
The huge sums invested in the youth set-up - producing two FA Youth Cup finalists in the last five years - continues to nurture a rich seam of talent.
Gary McAllister fielded 16 players who had come up through the ranks during the last Nationwide campaign.
Ogrizovic said: "Our aim is to get as many people as possible through to the first team.
“It is a difficult process but there’s some players who have made good impressions this year and they’ve got to ensure they make a significant impact on the first team next season."