The 31-year-old has been linked with a move to Championship rivals Leicester City, but has now decided to instead sign a new two-year contract at Coventry.
Chief executive Paul Clouting told BBC: “We are delighted that Marlon has shown loyalty to the club.”
He added: “Scoring goals is the way to get out of the Championship and it’s great news for the club that a player of Marlon’s calibre has committed to the club.
“He is the player that the supporters have wanted to hear about.
“It shows the ambition that we have.”
Coventry chairman Ken Dulieu said: “We promised supporters that we would do everything we could to keep the best players here at Coventry City and this is great step towards that.
“Marlon proved in the second half of the season that he is a fantastic striker and that he is capable of scoring goals.
“We had always hoped that we could convince Marlon to stay and have worked tirelessly with Andy Thorn to make this happen.
“We regard Marlon as pivotal to our objective of building a team capable of competing effectively in the Championship and hope this also sends a strong signal to the other players that we are talking to about our ambition for the club.”