Suarez has been desperate to leave the Reds since the end of last season and Arsenal have tried to take advantage by making a £40 million plus £1 bid that was supposed to trigger a clause in the forward's contract that allowed him to talk to interested clubs.
However, Liverpool are adamant there is no such clause, prompting a furious response from Suarez, who accused Reds boss Brendan Rodgers of going back on a promise to let him leave after the Merseyside team failed to qualify for this season's Champions League.
Rodgers reacted by banishing Suarez, who he said had shown "total disrespect", to train with the reserves and Henry, the figurehead of the Boston-based Fenway Sports Group that owns Liverpool, has now made it clear he will not consider letting the Reds' prize asset join a top-four rival with the new Premier League season just over a week away.
"We are not going to sell Luis," Henry was quoted as saying by the Guardian. "For all the top clubs it's extremely important (not to sell to a rival) but especially for Liverpool because we're not in Europe this year and have not been in the Champions League for a while.
"To sell to a rival for those positions, or one of them, would be ludicrous. Liverpool needs to be playing in Europe. It needs to be playing in the Champions League. That's what Liverpool football club is about."
Liverpool may yet face a Premier League arbitration hearing or legal challenge from Suarez over the disputed clause in his contract.
Yet even the threat of a Suarez mutiny won't change Henry's stance.
"I'm unequivocal that we won't sell to Arsenal, whatever the bid is," he said. "I have not said it to Stan (Kroenke, Arsenal's majority shareholder) but I had a personal conversation with others at Arsenal and told him (Arsenal chief executive Ivan Gazidis) we would not sell to Arsenal.
Suarez, who is suspended for the first six games of the season after biting Chelsea's Branislav Ivanovic last term, has made no secret of his preference for a move to Real Madrid, but Henry said even an approach from the Spanish club would not succeed at this late stage.
"He won't be sold even if a foreign club comes in because we do not have time to sign a suitable replacement," he said.
"It's a football reason. It's not about finances. That's why at this point, so late in the window, with everyone who's already moved or isn't moving, we can't replace him. So for football reasons we can't sell, and especially to Arsenal."
Despite Rodgers' furious reaction to Suarez's behaviour, Henry believes the 26-year-old could still have a major role to play for the Reds.
"Players usually want to win. They want to go, generally in any sport, where they can win," he said.
"That's why I think this particular episode is misguided. We've won more trophies than Arsenal, but I really don't want to get into that.
"The manager is upset, as he should be, the supporters are upset, Luis is, but that's going to be between those two and his team-mates. We need Luis. Hopefully this will pass."
Meanwhile, Arsenal winger Theo Walcott insists his team are capable of a successful season even if they don't land Suarez.
"If he (Suarez) comes, great," Walcott said. "Even if we stay as we are now, we are a great team and we showed that in the last 10 games last season.
"We just need to do that a bit more on a consistent level at the start of this year but every player who is at Arsenal is a top-class player."
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