Henry took over from Leonardo Jardim on October 13 past year, signing a deal with the club that finished runners-up in Ligue 1 last season until June 2021. Assistant Franck Passi will take over in the meantime, with previous manager Leonardo Jardim being tipped for a surprise full-time return.
Henry's situation has grown increasingly precarious, and the club have been linked with a return for Leonardo Jardim, who was sacked in October.
Monaco are three points adrift of safety in the Ligue 1 relegation zone.
Henry's spell at Monaco suggests that Villa dodged a bullet - more by the luck of him snubbing the job than their own judgement - and they are much better off in the more experienced hands of Smith.
The club's decision to dispose of Henry would have come as a shock if his comments at his scheduled weekly news conference earlier in the day were any indication.
But Henry has reportedly been sacked - at the very least, he has been suspended - having failed to bring about meaningful change with the Ligue 1 club, who are set to take the rare step of reinstating his predecessor Leonardo Jardim.
Monaco are placed 19th on table, one point off the bottom and their season have encountered one problem to another with Henry unable to handle the situation.
"We tightened up the group. We're sifting through them, we're going to war".
With just 20 games under the Frenchman's belt, Henry has won a measly four and his woeful defensive displays have led to a disappointing -21 goal difference.
Asked who would be left out at Dijon, he replied: "You will see".