Emergency vehicles blocked the wide avenue lined with shops that cuts across central Paris between the Arc de Triomphe and the Tuileries Gardens, normally packed with cars and tourists.
Matthias Fekl, the French interior minister, paid tribute to the dead policeman and praised his colleagues who he said had prevented a bloodbath.
The attack started around 9 p.m. local time in Paris, when a vehicle stopped next to a police vehicle stationed on the side of the road.
"The man in the wanted notice issued by Belgian authorities presented himself to a police station in Antwerp", ministry spokesman Pierre-Henry Brandet told AFP. It saw the assailant getting off a auto and opening fire at officers inside another vehicle. "As soon as the policeman opened the door of the van, he fell".
Brandet said that the police officers "avoided a blood bath".
The Daesh terrorist group has reportedly claimed responsibility for the Paris attack.
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Police sources said the man was known to intelligence services.
A police document obtained by The Associated Press identifies the address searched in the town of Chelles as the family home of 39-year-old convicted criminal Karim Cheurfi.
French police warned the public to stay away from the area and armed officers are at the scene.
Voters will cast ballots in the first round on Sunday of what has turned into the most unpredictable French election in memory as the gap between four frontrunners narrows.
French President Francois Hollande has assured people of extra vigilance before the presidential elections.
Concerns over security have been raised since Tuesday when two men were arrested for plotting an attack before the French presidential election, which is set to begin on Sunday.
A machine gun, two hand guns and three kilos of TATP explosive were among the weapons found at a flat in the southern city along with Islamic State propaganda materials, according to Molins.
Some of the candidates later clashed over whether official campaigning, which has just one more day to run, should be brought to a full stop in light of the incident.
"We are suffering the consequences of a laxity that has continued for years", she said shortly before the shooting, promising to take a hard line against extremists and anyone suspected of being an Islamist.