The short statement from the club read: "AS Monaco announces that it has decided to suspend its duties as coach of the first team Thierry Henry from this day and waiting for a final decision.
"Franck Passi will train the professional group this Friday."
Henry has come under increasing pressure at the Ligue 1 side with results not improving since he took over from Leonardo Jardim in October in his first managerial role.
The club is in the midst of a four game winless streak, and have not won in five in the league, leaving them 19th in the table and three points from safety.
This week featured a pair of disastrous results for Henry and Monaco, with the club getting routed at home, 5-1, against Strasbourg on January 19.
Aside from the heavy defeat, Henry came under fire for comments made toward Strasbourg left-back Kenny Lala, as the manager insulted the defender's grandmother.
While Henry apologised, a 3-1 home defeat to second-division side Metz in the Coupe de France on Tuesday inflicted further humiliation on his side.
Henry then threatened on Thursday to leave out numerous first-team players from Monaco's weekend clash with Dijon, claiming he would only pick players up for the relegation fight.
"You have to see. There were not too many people in training yesterday. We'll see today," Henry said in his news conference Thursday.
"It's important to see the reaction at Dijon. We are in a critical situation - unfortunately, that has not changed.
"We tightened up the group. At some point, you need guys who want to save the club, who don't think about themselves. We're sorting it out. We're going to war."
When asked which players would be left out, Henry replied: "You're going to see the team. There are too many names."
Henry had previously said he was more worried about Monaco's future and facing relegation than his own.
Overall, the former Belgium assistant has managed only five wins in his 20 games in charge of Monaco and may not receive any further opportunities to improve on that number.