The council voted 39-3 to suspend Ford's authority to appoint and dismiss the deputy mayor and his executive committee, which runs the budget process. The council also voted to give the deputy mayor authority to handle any civic emergency.
The city council does not have the authority to force Ford out of office unless he is convicted of a crime. Ford has refused to step down.
Ford admitted last week to smoking crack, and new allegations of drunk driving and prostitution have surfaced.
Ford on Thursday used vulgar language to deny that he pressured a former female staffer for oral sex and admitted that he had driven drunk. He later returned to apologize for his vulgarity and said he was seeking professional help, though he refused to elaborate.
"I want to apologize for my graphic remarks this morning. Yesterday I mentioned it was the second worst day of my life, except for the death of my father. For the past six months, I have been under tremendous, tremendous stress," he said.
On Monday, the council will attempt to strip most of Ford's remaining powers. A motion, already signed by 28 of the 44 council members, would take away his budget and appoint the deputy mayor as head of the executive committee.
After all the controversy, Ford and his brother will begin hosting their own Canadian television show, "Ford Nation," described as part talk show, part reality show, on Monday nights.
ABC News and the Associated Press contributed to this report.