Less than 12 months after taking Perth into a highly controversial A-League grand final loss to Brisbane, Ferguson was dumped by Glory owner Tony Sage on Monday.
"Look, sitting bottom of the league with the team we have assembled is not acceptable in any level of professional sport," Sage confessed on announcing Ferguson's demise.
"We were seven hundred grand over the salary cap.
"If you go to at least five clubs, they pay underneath the salary cap and we paid 700 grand over the salary cap."
The Glory boss revealed that Ferguson and club management had partted on "mutual" terms.
Perth plummeted to last spot on the 10-club A-League ladder on Saturday with a 2-nil loss to Melbourne Heart in Melbourne.
Glory has not won in their last eight games and have not even scored at their last four engagements.
Glory has won just twice since Round 5 back in early November and were sitting fifth immediately after the Christmas-New Year festive season.
Glory confront a home clash on Saturday against tearaway league leaders Central Coast.
Ferguson will be replaced by Glory playing great Alistair Edwards.
Edwards, 44, played 93 games with Glory from1998-2004 as well as assistant coaching stints with Australia's under-20 team in recent seasons.
Sage declared that Edwards is an interim Glory coach and that a worldwide search for a new boss in time for next A-League season would commence almost immediately.
Another former Glory great Gareth Naven will join Edwards as assistant-coach.
Ferguson was told on Sunday night that he would not continue and finish the remainder of a two-year contract he signed before this season.
Ferguson confessed in his post-match media conference after his outfit's loss to Heart that his position as head coach was under siege.
He denied his club was in crisis.
"At the end of the day, I'm in a results driven business and the results at this moment in time have not been great," he conceded.
"Tony (Sage) has been very supportive and I would not say it's a crisis yet."