Jardim had led Monaco to the French title in 2017.
Henry, who started out playing for Monaco and went on to enjoy a stellar club career with Arsenal and Barcelona, has been working as assistant coach for the Belgian national team but has never been in charge of a team in his own right.
However, this is his first foray into management.
Monaco is now three places from last position in Ligue 1, France's top football league, and fired manager Leonardo Jardim on Thursday.
Henry began his professional football career in 1999, where he 125 appearances, registering 25 goals in the process.
An eight-year spell with Arsenal - where he won two Premier League titles - saw him become the club's all-time leading scorer with 228 goals, while he also won the Champions League during his three-year stint with Barca.
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During Arsenal's search for a new head coach to succeed Arsene Wenger over the summer, Henry's name was consistently linked with the post.
Henry was a World Cup victor with France in 1998 and won the European Championship two years later, scoring 51 goals in 123 appearances for Les Bleus.
"In the first place, I thank AS Monaco for giving me the opportunity to coach the team of this club so special to me", his statement read.
He retired as a player in December 2014 to work as a television pundit, before joining Belgium's coaching staff in 2016.
"His knowledge of football, his passion for the game, his high standards and his commitment to our colours make his nomination a reality".
The news that Thierry Henry would not be succeeding Steve Bruce as the next Aston Villa manager seemed to be a case of a blessing in disguise, and indeed a dodged bullet, for both Henry and Villa.
The former striker will be joined by Joao Carlos Valado Tralhao, under-23 coach at Benfica, and Patrick Kwame Ampadu, coach at the Arsenal Academy.