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Badosa wrote on social media Sunday that the pair decided to amicably part ways after being a couple since last year.
The Greek became the first player in the professional era to win his first three Monte Carlo finals in straight sets.
Eighth seed Ruud held his nerve as five unforced errors from Djokovic allowed him to go 3-0 up in the decider and he calmly closed out the victory.
He will be replaced in the draw by Zizou Bergs.
The Tunisian won 6-1, 6-2 to storm into the third round.
The Spaniard is chasing a second Grand Slam title after winning the US Open crown last year, while the Serbian veteran is on course for a record-breaking 23rd men's singles major.
The Serb also equalled Rafael Nadal's record of 22 Grand Slam singles titles with the win.
Nine-time champion Djokovic will meet third seed Stefanos Tsitsipas in Sunday's decider after the Greek booked his first final at Melbourne Park by beating Russian Karen Khachanov.
Khachanov reached the semifinals after ailing American Sebastian Korda retired while trailing 7-6(5), 6-3, 3-0.
A year after dumping Sinner out in the quarters at Melbourne Park, third seed Tsitsipas crushed the Italian's hopes of a great escape.
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