Ford, the eighth overall pick in the 2003 NBA Draft out of Texas, averaged 12.2 points and 6.6 assists in 72 games last season.
The 6-footer missed the final 26 games of the 2003-04 season and all of 2004-05 because of neck surgery.
The 6-foot-11 inch Villanueva was a first round pick by Toronto in 2005.
He averaged 13 points and 6.4 rebounds in 81 games, and set Raptors rookie records for points (48) and rebounds (18) in a game.
The former University of Connecticut product was selected to the NBA's All-Rookie First Team.
"We are sorry to see Charlie leave, but getting better comes at a cost," said Toronto president and general manager Bryan Colangelo. "T.J. Ford's best attributes, quickness and play-making, are a perfect fit for our team."