The proposed expansion would take Franklin's Gardens above the minimum capacity requirement for staging a Heineken Cup quarter-final. The Saints board has agreed to submit a full planning application with a view to the new stand being built in the summer of 2015 in order to capitalise on the Rugby World Cup.
"This time next year we will have paid off all our debts from our previous developments," said acting chairman Tony Hewitt.
"By building the new north stand in 2015 we will be ideally placed to reap the rewards of the next Rugby World Cup, which of course has matches being played in Milton Keynes and will see the sport's profile dramatically increase in the area"
Northampton Borough Council leader David Mackintosh is backing the Saints plans and he is confident that formal negotiations over the loan can be completed quickly.
"It speaks volumes that in a climate where professional sports clubs have taken on more and more debt that the Saints are actually in a position where they are about to become debt-free," he said.
"This makes me confident that an investment from the Borough Council would be well placed. Not only is the Saints on a solid financial footing, but the expanded Franklin's Gardens would enable the club and the town as a whole to benefit from Rugby World Cup 2015, bringing more people into Northampton to watch top class rugby.
"With their plans already drawn up and the planning process already well on its way I am looking forward to seeing the new North Stand be built sooner rather than later."