I have had a offer to buy my house on a land contract for the full amount left on my mortgage. Can I sell it this way and do I have to get approval from my mortgage company?

You can get away with it because you retain title, but it would be foolish. You will still owe your lender each month, and you have no guarantee whatsoever that the person occupying your property lock stock and barrel will pay you a dime each month, forcing you regain possession in court while still paying the mortgage. There's all the associated problems of property taxes and so on, and reasonable upkeep.
The market is rebounding. Don't be sweet talked into anything if you don't absolutely have to.
If I had a mortgage, I would sell outright and pay off the mortgage. Why toss and turn when his payment is late, doesn't show up, or he floods the place, or burns it down, and walks away?
And what if he knows it's worth more? Did you get any real appraisals recently?

Thank you for your reply, we had it appraised and we owe more than its worth. But the person wanting to buy it is our nephew. I would not think a Marine and an employee of Ford would trash the house, but one never really knows. I will give thought as to what you said and go from there. Thank you again.

In this case, I wouldn't see a problem with a land sales contract. As joy said, you retain ownership so it shouldn't affect your mortgage. You can even have your nephew pay your mortgage payments directly.

I'm assuming your nephew doesn't have the credit or down payment to get a mortgage on his own.

Good relative who can't get a mortgage, willing to pay you more than it's worth right now?
Sounds like a win-win.
Maybe even a win-win-win, if the value keeps going up to when he wants or has to move.

In this case, I wouldn't see a problem with a land sales contract. As joy said, you retain ownership so it shouldn't affect your mortgage. You can even have your nephew pay your mortgage payments directly.

I'm assuming your nephew doesn't have the credit or down payment to get a mortgage on his own.

That's true , the banks won't lend without 20% down, and that's a bit much for him. He has set up payments to come directly to us from his bank so I'm not to concerned. Life is getting a bit much , if you no what I mean.
Thank you for your time