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Henry led the side to the 'play-in' round of the Eastern conference play-offs but lost 2-1 to New England Revolution, who went on to win the Conference Final.
The 43-year-old has now quit the club, ahead of the new season, which is set to get underway in April, because of family reasons, with his family still in London and not being able to see them.
"It is with a heavy heart that I've decided to take this decision," the former Monaco manager said in his statement.
"The last year has been an extremely difficult one for me personally. Due to the worldwide pandemic, I was unable to see my children.
"Unfortunately due to the ongoing restrictions and the fact that we will have to relocate to the US again for several months will be no different. The separation is too much of a strain for me and my kids.
"Therefore, it is with much sadness that I must take the decision to return to London and leave CF Montreal.
"I would like to thank the fans, players and all the staff of this Club that have made me feel so welcome. I would also like to thank Kevin Gilmore, Olivier Renard and of course Joey and all of the Saputo family for giving me this wonderful opportunity.
"We had an impossible year together and to make the playoffs with this group of people is an experience that I will never forget. Thank you all for being there on this journey and I wish you all the success for the future."
The former Barcelona striker started his coaching career as assistant manager to Roberto Martinez at Belgium, before moving on to manage Monaco, where things didn't go well.
His move to Montreal was a first step back after things went south in Ligue 1 and he was recently heavily linked with a return to England as Bournemouth manager.
The Cherries eventually decided to give interim manager Jonathan Woodgate the chance to take charge of the team until the end of the season.
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