Hansen, who led Wales from 2002-04, has been part of Henry's All Black coaching team for the past seven years and was the heavy favourite to take the top job following his role in guiding New Zealand to World Cup glory in October.
The 52-year-old has signed a two-year deal with the globe's No1 ranked side, with his first Tests in sole charge coming against Ireland next summer.
"In this sport it's the greatest honour you can receive," said Hansen, who tasted series success against the Lions in 2005 and emphasised revolution rather than revolution immediately after his appointment.
"It comes with a huge amount of responsibility and all I can say is that I'm passionate about rugby, passionate about New Zealand, passionate about the All Blacks jersey and its legacy, and I look forward to the next two years with this team, taking it forward and enhancing that legacy.
"If you look at the rugby World Cup, winning teams have struggled afterwards and that is what makes it so exciting. It was a magnificent thing that we achieved but this is a new team, a new group of people and we have to make our own history.
"So that tells me what we have been doing hasn't been too bad and that continuity of me going from assistant to head coach allows us to have an understanding of what has been successful."
Hansen was part of the most experienced trio in international coaching when he worked alongside Wayne Smith and reported to Henry but he has opted against building a similar triumvirate this time around.
The ex-Canterbury midfielder, who has built his reputation as a forwards coach, admitted he couldn't put his 'dream team' in place and had therefore opted to choose one assistant and a range of back up specialist coaches instead.
"I would have loved to have had two assistants if we'd have had the dream team people available," added Hansen, who is not expected to announce the name of his assistant until early next week.
"But doing the research I did in trying to get this team together, it became obvious and clear that that wasn't the case. So the team's needs were better suited by one (head coach) and one (assistant).
"I researched everybody that I possibly could, right throughout New Zealand, worldwide as well, and I'm confident and extremely happy with the people I've chosen and I believe they can do a job for New Zealand."