Henry faces a big task to revive the club where he started his glittering playing career, with Monaco, French champions and Champions League semi-finalists in 2017, languishing 18th in the 20-team standings after winning one of their first nine games.
“This club will always have a big place in my heart," Henry told reporters on Wednesday. "So to be able to come here and start again, it is a dream come true. There is a lot of work to do, as you can imagine - but I am more than happy to be here.”
The 41-year-old replaced Portuguese Leonardo Jardim who was sacked less than six months after leading Monaco to second place in the standings following their first league title since 2000.
Henry was assistant coach of the Belgium team who finished third at this year's World Cup after losing to France in the semi-finals.
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Forward Kylian Mbappe, who started his career at Monaco, will be back in action for champions Paris St Germain at home to Amiens on Saturday after scoring a late penalty to earn France a 2-2 draw with Iceland and helping them beat Germany 2-1.
PSG have won their first nine league games of the season and lead the standings by eight points from Lille who travel to Dijon on Saturday.
Sixth-placed Olympique Lyonnais host Nimes on Friday and Nice entertain local rivals Olympique de Marseille, third in the standings, on Sunday.
(Reporting by Eleanore Kelly, Editing by Ed Osmond)
