The Football Association's membership committee voted against Steve Bruce's side being re-named Hull Tigers on Tuesday and Allam - who pledged to cut ties with the club whom he has backed since 2010 - is adamant that he will keep his promise despite the setback.
The full FA council must adhere to the recommendation from the membership committee in order to officially block the proposal.
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The 74-year-old has not given up hope of the name change still taking place as he revealed his intention to ballot the club's season-ticket holders.
"We will announce a ballot this week and we will challenge the decision," Allam continued.
"If the FA does not allow our plan, we will walk away, put it on the market to sell the club. We would not put it into liquidation; there is a lot of money at stake. I will get my money when I sell."
Hull fans have responded negatively since the proposal was put to the FA in December, with campaign group 'City Till We Die' born to repel the move.
The Egyptian argues that the club would be more commercially viable with a less common name, with a total of 13 sides in the top four English divisons using the 'City' moniker - including six current Premier League teams.