Ford joined Toulon as backs coach in September when he vowed to take the mis-firing giants to the next level.
Ford, released by English Premiership side Bath in May, joined Toulon as backs coach in September when he vowed to take the mis-firing giants to the "next level".
Boudjellal told a press conference the decision to dispense with Dominguez had "not been an easy one to take".
Dominguez was only appointed in the summer to succeed Bernard Laporte, who guided Toulon to three European Cups and a French title in a hugely successful five-year spell.
Former Italy international Dominguez leaves after four wins, three defeats and one draw with Toulon placed fourth in the Top 14 and second in their Champions Cup group.
"We had a disagreement, this is something that happens," Boudjellal explained whilst underlining his "esteem" for Dominguez.
"Diego is first and foremost my personal failure because it was me who chose him. I accept that," said the French tycoon who made his fortune through comic book publishing.
The two men will meet this week to discuss the terms of the rupture.
Toulon's colourful and outspoken owner added: "We are going to try to set up a system of playing that everyone will follow.
"None of the players called for Diego's head, but I wasn't happy with what I was seeing.
"If I were a Toulon fan, I wouldn't feel like buying a ticket to come to the stadium."
The 50-year-old Ford, who arrived at Toulon as successor to former backs coach Steve Meehan, has been given a season-long contract.
His first game in charge is Saturday's Top 14 clash against Grenoble at the Stade Mayol.
A former Ireland and England backs coach and boss of Saracens, Ford will combine his new role with his previous position as Toulon's backs coach.
Boudjellal's decision to switch managers comes as he is in advanced talks to sell the club he has bankrolled to the European title three times and the French championship in 2014 during his 10 years at the helm.
The club is set to be bought by a French film producer -- Gerard Barba -- and Lucien Simon, a lawyer and potential new club president.