He was an assimilated, secular Jew. That is non-practising, not necessarily atheist. That is also by extension either a bit racist or nationalistic, but more or less forced upon him, by the rampant antisemitism around him, as he saw it. He is frequently described in biographies as "non-religious", but not as an atheist. He talked a lot about God, Faith and Religion.
In connection with his Zionist Jewish State idea:
Herzl himself agreed with this, arguing that what bound the Jews together was not necessarily that they themselves identified strongly as Jews (although this would come), nor was it on the basis of a shared religion (since many Jews including Herzl did not practice Judaism), nor was it on the basis of being a single race, but that they were identified by non-Jews, and in particular by the forces of anti-Semitism, as distinct (Elon, 1975; Stewart, 1981).
For Herzl, the Jews were ‘one people – our enemies have made us one without our consent… Distress brings us together, and, thus united, we suddenly discover our strength’ (Herzl, 1988/1896, p. 92). As described above, Lewin made the same point using the phrase ‘interdependence of fate’ (Deutscher, 1968; Sartre, 1948, also make this suggestion).
W. M. L. Finlay: "Pathologizing dissent: Identity politics, Zionism and the ‘self-hating Jew’", British Journal of Social Psychology (2005), 44, p201–222.
This is clear in in Herzl's own words, where he sees Jews and himself ethnically defined, not religiously, by others:
Herzl: The Jewish question still exists. It would be foolish to deny it. We have honestly striven everywhere to merge ourselves in the social life of surrounding communities, and to preserve only the faith of our fathers. It has not been permitted to us. […]
We are one people — One People! [We need] the Promised Land, where it is all right for us to have hooked noses, black or red beards, and bow legs without being despised for these things alone. Where at last we can live as free men on our own soil and die in peace in our homeland.
We are one people — our enemies have made us one without our consent, as repeatedly happens in history. Distress binds us together, and, thus united, we suddenly discover our strength.[…]
Zionism is a return to the Jewish fold even before it becomes a return to the Jewish land.[…]
God would not have preserved our people for so long if we did not have another role to play in the history of mankind.
From: Rabbi Barry L. Schwartz: "Judaism’s Great Debates. Timeless Controversies from Abraham to Herzl", The Jewish Publication Society: Philadelphia, 2012.
The last sentence indicates either his secularism, or his flexibility in invoking religious motives, but very probably not 'his atheism'.
Presumably Herzl, as a private individual and a man of culture with an interest in history, would very much have liked to visit both the Church of the Holy Sepulcher and the Dome of the Rock, but he realized that an official Zionist delegation, no matter how secular its members might be, had to respect the sensitivities of religious Jews in its public actions.[…]
What, then, made a Jew a Jew? Herzl was too smart and politically seasoned to get caught in a restrictive definition. Yet he offered a formula – a surprising one for a non-religious man like himself – that evinced his profound awareness of the complexity of the issue and the need to find a common denominator that would be acceptable to different groups of Jews. ‘We recognize ourselves as a nation through our faith [Wir erkennen uns als Nation am Glauben],’ he asserted.
Elsewhere he wrote: ‘Our belonging to each other historically is based on our ancestral faith, for we have long since adopted the languages of many nations.’
This was descriptive rather than prescriptive, reflecting the nature of the way most of the Western and Central European Jews of Herzl’s time, place, and station understood their religion – as the outer framework of their Jewish national identity. A Jewish person who gave up his religious affiliation has given up his claim to be Jewish in any sense – even in the view of a non-religious man like Herzl.
The link between Jewish national identity and religious affiliation should be viewed, with all due caution, as the context for a brief passage in which Herzl considered – and immediately rejected – the possibility that the Jews, at least those in Austria, might collectively convert to Christianity.
When Herzl was so bold as to ask how the Church managed with the existing situation, the Pope responded: ‘I know, it is not pleasant to see the Turks in possession of our Holy Places. We simply have to put up with that. But to support the Jews in the acquisition of the Holy Places, that we cannot do.’ Herzl supposed that if he were to stress the humanitarian aspect of Zionism, as a way of addressing the hardships faced by so many Jews, as well as Zionism’s nonreligious nature, he might be able in part to circumvent the Church’s theological objections. But instead he jumped from the frying pan straight into the fire. The Pope told him:
There are two possibilities. Either the Jews will cling to their faith and continue to await the Messiah who, for us, has already appeared. In that case they will be denying the divinity of Jesus and we cannot help them. Or else they will go there without any religion, and then we can be even less favorable to them.
The Pope asked: ‘Does it have to be Gerusalemme?’ Herzl responded that the Jews sought only the terrestrial Palestine.
From: Shlomo Avineri: "Herzl's Vision", BlueBridge: Katonah, 2013.
Religion did not motivate Herzl. Calling him an atheist might go too far but it seems fair to say that for a not very religious man it was mainly politics that was his driving force, letting him freely use religion as an argument, talking point, and ethnic marker.