The man who coached the Lions in Australia a decade ago had been in charge of the All Blacks since December 2003 and had enjoyed a win ration of more than 85 per cent thanks to 88 victories in 103 Tests.
"I've had enough, it's been an enormous privilege to coach the All Blacks and I am exceptionally proud of how the team has added to the legacy," said Henry, whose team became the first All Black side to claim a world crown since the inaugural global gathering in 1987.
"You can't finish better than that. I leave with a great feeling of pride and satisfaction. There's a real sense of pride because I think we've ticked the boxes. It's a sense of a job well done by a group of 45 people.
"I am exceptionally proud of how the players have developed an extremely professional and enjoyable culture and environment, and how they have reached out to people of all ages and put a smile on their faces, both in New Zealand and overseas.
"So I want to say a special thank you and congratulations to all the players who have played during this time, especially to Tana Umaga and Richie McCaw, the two long-term captains."
Henry guided his countrymen to a series whitewash of Sir Clive Woodward's Lions in 2005, four years after his own tourists had been beaten 2-1 by the Wallabies in a thrilling encounter with the then world champions.
The 65-year-old secured five Tri Nations titles in eight attempts, including four in a row between 2005 and 2008, and completed three Grand Slam tours of Britain and Ireland during his time in charge.
He previously coached Wales between 1998 and 2002 - a spell in which he led his adopted nation to a record 10 successive wins.
The former Auckland Blues boss will now coach the Barbarians against Australia at Twickenham on November 26 and has openly admitted that he would be keen to talk to the Rugby Football Union about a possible role with England.
Also linked with a post at Cardiff Blues, Henry looks set to retain some involvement in coaching in his homeland, however, with New Zealand Rugby Football Union chief Steve Tew keen to keep him involved in one way or another.
"I've had a long association with New Zealand rugby and I'd like to continue that," added Henry.
"It would be good to keep working in a rugby environment with those people. I'm looking forward to helping fellow coaches if I can."
Tew, who stood by his man after the All Blacks' quarter-final exit at the 2007 World Cup, believes Henry still has plenty to offer New Zealand rugby and is therefore desperate not to lose him to a rival Test nation.
"Graham leaves the All Blacks job as one of the greatest coaches in the game," said Tew.
"His record is unsurpassed and while he will now get time to spend with family and friends, and do the odd bit of fishing, we are delighted that Graham is still going to be involved in New Zealand rugby.
"He has a great relationship with the country's professional coaches and he still has so much to offer the game. It's fantastic that up-and-coming New Zealand coaches will continue to benefit from his vast knowledge."