The former Arsenal striker, 42, returns to a head coaching role for the first time since January when he was sacked by French Ligue 1 side Monaco.

"It's an honour to coach the Montreal Impact and return to MLS... I've always kept an eye on the club and now I'm here," Henry said in a statement on Thursday on the club's website.

"It's a league I know well, in which I had some very nice moments. To be in Quebec, in Montreal, which has an enormous multicultural heritage, it's extraordinary."

The club said the former Monaco, Juventus, Barcelona and New York Red Bulls player had the option to extend his contract by a further year.

"Henry will bring a new energy to our club. He shares our vision to elevate this club and will help us achieve our goals on and off the field," Impact president Kevin Gilmore said.

"He is a competitor and a leader who has proven himself at the highest level throughout his career. He now brings these qualities with him to Montreal."

Henry, who retired in 2014, lasted only three months at Monaco. The World Cup winner was dismissed in January after winning four of his 20 games in charge and with the club threatened by relegation.

He had worked before that as assistant coach to the Belgian national team but had never been in charge of a team in his own right.

Arsenal's top goalscorer with 228 goals in all competitions, Henry won two Premier League titles and two FA Cups at the London club in eight seasons.

He then moved to Barcelona for three seasons, winning a Champions League title along the way, and finished his career at New York Red Bulls.

He scored 51 goals in 123 appearances for France and played at four World Cups, including 1998 when they won the tournament for the first time.

Henry will be presented to the media on Monday.

Impact finished ninth in the MLS Eastern Conference and 18th overall this season and dismissed coach Remi Garde in August.

They have not qualified for the MLS Cup playoffs in the previous three seasons.

Australian Associated Press