The club announced his arrival via Twitter, with Henry penning a deal that will keep him at the Stade Louis II until June 2021:
In a statement on the club's official website, Henry said: "In the first place, I thank AS Monaco for giving me the opportunity to coach the team of this club which is so special to me. I am very happy to come back to AS Monaco and extremely determined to meet the challenges ahead. I can not wait to meet the players to start working together."
He also took to Twitter to express his delight:
Arsenal wished him well and looked ahead to an interesting matchup:
The Frenchman replaces Leonardo Jardim, who was sacked on Thursday a little more than a year on from leading Monaco to a first Ligue 1 title since 2000.
He also led them to the UEFA Champions League semi-finals in 2016-17, but Monaco disappointed last term and are sitting 18th in Ligue 1.
French Football Weekly's Jeremy Smith and Rich Allen gave their thoughts on Henry's appointment:
Jeremy Smith @jeremysmith98
Perhaps will also help that the club acknowledge they've had a bad transfer window and Monaco's poor start means Champions League qualification is already unlikely, so he may be able to work with lower expectations/less pressure for this season - certainly till the Jan mercato.
Rich Allen 🇨🇵⭐⭐🇨🇵 @rich_allen85
Not 100% sure on Thierry Henry taking over at Monaco. A very big ask as a first managerial role. However he'll garner instant respect from the youngsters, many of whom will have looked up to Henry when they were kids. Will be interesting to see how the senior players take to him.
Monaco have opted to bring in the 41-year-old despite the fact that he's never held a top-level managerial job.
He has, though, been an assistant to Roberto Martinez for the Belgium national team since 2016 and helped to oversee the Red Devils' third-placed finish at the 2018 FIFA World Cup.
"As a manager, he doesn't have a lot of experience, but he will learn," he said. "If he leaves the Belgium team, we will be sad, but I think for him maybe it's a good time to go. He wants to be a manager, so he will be a top manager, for sure."
After the tournament, he departed his role as a pundit for Sky Sports in order to focus on his coaching career.
He was also linked with the Aston Villa job recently, and according to Sky Sports, he held preliminary talks with the EFL Championship club. That was before he was made aware the Monaco job may become available.
Henry started his senior playing career at Monaco, and his achievements as a player make him an exciting appointment at the Stade Louis II.
The former striker won a league title at Monaco before going on to claim two Premier Leagues with Arsenal and two La Liga crowns and the UEFA Champions League with Barcelona.
With France, he won the 1998 World Cup and the UEFA European Championship in 2000.