Henry's position as coach became tenuous when New Zealand crashed out of the World Cup following the 20-18 quarter-final defeat to France.
The 61-year-old former Wales coach has not declared whether he will re-apply for the role but has until November 26 to make a decision on his future.
"The New Zealand Rugby Union (NZRU) board has decided it will invite applications for the position of All Blacks coach," a statement read.
"The board, which met in Wellington today, decided that a contestable process was the most appropriate course of action at the end of the current coaches' four-year tenure, and at the conclusion of the Rugby World Cup cycle.
"The announcement follows the conclusion of the All Blacks coaches' performance reviews for 2007.
"The NZRU rugby committee reported the results of its review, which involved discussions with coaching staff and members of All Blacks management, to the full NZRU board earlier today. "
During the four years under Henry, the All Blacks were unbeaten on home soil and had 42 wins from 48 matches.
Henry insists he and his assistants Wayne Smith and Steve Hansen will take time to consider their options.
"We all want what is best for New Zealand rugby and understand the board's decision to ask for applications," he said on the All Blacks' official website.
" All three of us will take time to think about the next steps and we'll have a decision on the 26th."