The Ligue 1 side released a brief statement on Thursday saying Henry had been relieved of his duties while a "final decision" was made, though he has effectively been sacked and will shortly be replaced by the man he took over from, Leonardo Jardim.
Appointed to the position on October 13, he's won just four of 20 matches across all competitions and taken just nine points from an available 36 through 12 Ligue 1 fixtures.
Monaco have not confirmed if Passi will take charge of Saturday's Ligue 1 match away at Dijon or next Tuesday's Coupe de la Ligue semi-final against Guingamp.
Fabregas played with Henry at Arsenal and is understood to be bewildered that only two appearances into his Monaco career, he will now be playing under a new manager.
As a result he was suspended on Thursday while the club makes a decision on his long-term future.
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Henry was one of the most feared strikers in the world and replaced Jardim during the first half of the season in which Monaco struggled mightily out of the gates.
The club said Franck Passi, Henry's assistant coach since December, would be in charge of the team's training on Friday.
"We need guys who want to save the club, who don't think about themselves".
Henry won just five games across all competitions during his time at Monaco. There are too many names.
Monaco are three points adrift of safety in the Ligue 1 relegation zone.