It was a completely dominant performance from the unbeaten Super Six champion, who had WBC light heavyweight champion Dawson on the canvas three times in all.
Ward knocked down Dawson late in the third round and early in the fourth to take control of the fight and finished him off with a combination 15 seconds before the end of the 10th.
Victory took his record to 26-0 with 14 knockouts, while Dawson drops to 31-2.
"That's what we needed," Ward said. '"A lot of people in boxing are knockout hungry. Everybody wants the knockout. I tell people you can still entertain without a knockout. But a knockout is always great.
"That's the last piece of the puzzle in my game that I want to keep working on. This is the first step toward that tonight against a top of the line opponent."
"I took a big risk fighting the bigger man. He had the advantage in height and reach but he sacrificed the weight. In boxing you have to take a risk to get the prize."
Dawson added: "He's a lot faster than I thought he would be. He was strong too. I can't take anything away from him. He really is one of the best."
Also on the bill in Oakland, WBC lightweight champion Antonio DeMarco of Mexico beat American John Molina Jr. with a first-round stoppage which came in just 45 seconds thanks to a thumping straight left.