Henry will take his first steps into management at the club where he began his professional career, and has signed a three-year contract.
“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," he said.
"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.”
Vadim Vasilyev, Monaco's vice president, has already waxed lyrical about the appointment, made after the sacking of Leonardo Jardim earlier this week.
“His knowledge of football, his passion for the game, his high standards and his commitment to our colours make his nomination a reality," he said.
"Thierry is both aware of the task ahead and eager to start his new job. He can count on our trust and all our support to bring a new dynamic to the team and carry out the mission.”
Indeed, Henry's task is a difficult one as he is charged with turning around the form of a side which have picked up only six points from nine Ligue 1 matches this season.
While it's true that Monaco won the French title a mere 17 months ago, a mass of sales including Kylian Mbappe, Thomas Lemar, Fabinho, Tiemoue Bakayoko and Bernardo Silva has drastically reduced the quality of the squad.
Currently 18th in Ligue 1, Monaco return to action on October 20 with a trip to Strasbourg.