The 58-year-old had been in charge at Valley Parade since June 2004, when he replaced Bryan Robson.
The Bantams had won just one of their last 10 matches under Todd, and he left them just three points above the relegation zone.
"Unfortunately, results over the last 20 league games have been poor and so it is time for a change," read a statement from the Bantams.
"Colin has had to deal with some very difficult situations but has always met these challenges in a professional manner."