Price, 36, took charge ahead of the 2012 season, having previously been assistant to Wayne Bennett.
Paul McGregor, who was Price’s assistant at the club, will now take over until at least the end of the season.
Dragons CEO Peter Doust said: “Steve Price has been involved at our club for over 13 years. He is a person of the highest integrity who has contributed enormously to our club in so many ways throughout this time.
“Unfortunately team performance and results have not met the required standards, particularly this season, despite a refresh of performance management strategies and structure, at the end of last year, and a significant change to the playing roster.
“Whilst we can never predict the future, the board determined that change was required for the balance of the 2014 season.”
They have since been joined by the high-profile signing of Benji Marshall, upon his return from a short stint in rugby union.