Henry, who has been the team’s technical advisor for the past two seasons, replaces Wayne Pivac and returns to the position he held from 1992-97.
He has also coached the Blues Super 12 team from 1996-98, Wales from 1999-2002 and the British and Irish Lions on their 2001 tour to Australia.
He took Wales to a record 10 consecutive Test wins but a run of poor results resulted in his resignation in early 2002.
Auckland Rugby chief executive David White said Henry’s appointment was an exciting one.
‘Graham’s coaching talents are amongst the best in the world,’ he said. ‘To have him once again coaching our NPC team is exciting for the players and everyone who has an interest in Auckland Rugby.
‘Graham will now play a key role in the appointment of the assistant coaches, which we hope to have finalised next week.’
Henry said he was looking forward to the challenge of being a head coach again.
‘I’ve thoroughly enjoyed the three campaigns I have been a part of since I came back from Wales,’ said Henry.
‘The last two NPC seasons and this year’s Super 12 have been amongst the most enjoyable I have experienced. Now I am looking forward to this next challenge, which I know will be every much as exciting and rewarding.’