Police are reporting that there were at least two attackers involved in the shooting.
Interior Ministry Spokesman Pierre-Henri Brandit said that the suspect got out of a vehicle and opened fire on a police van, killing one officer.
Police have not given a possible motive for the attack but a terrorism investigation has been launched.
French police tweeted, "Police intervention underway in the area of the #ChampsElysees avoid the sector and follow the instructions of the police forces".
The shooting comes just a few days before France's presidential election and just two hours after a police lockdown on Rue de Rivoli - a nearby street in the heart of the city.More news: Jeremy Corbyn says election is not a 'foregone conclusion'
Islamist militancy is a major issue in the polls after recent mass attacks claimed by so-called Islamic State, with 238 people killed in jihadist attacks since 2015, according to data from AFP news agency. The Tunisian-born French citizen was killed by law enforcement.
French police said that the attack was probably a "terrorist act" and the world famous Champs Elysees was on lockdown by 9pm.
The incident came as French voters prepared go to the polls on Sunday in the most tightly-contested presidential election in living memory.
Police officers block the access to the Champs Elysees in Paris after a shooting on April 20, 2017.
Subway stations in the area were closed off on Thursday night while police secure the scene.More news: Like Trump, China Has No Good North Korea Options: QuickTake Q&A
President Francois Hollande has called an emergency meeting on Thursday evening. Trump said. "It just never ends".
A police spokeswoman told Associated Press that the gunman targeted police guarding a metro station.
Earlier this week, two men were arrested in Marseille who police said had been planning an attack ahead of the election. The second attacker escaped, reports said, but Brandet said it was too early to say whether the attacker had an accomplice.
A witness identified only as Ines told French television station BFM that she heard a shooting and saw a man's body on the ground before police quickly evacuated the area, where she works in a shop.
President Donald Trump, speaking at a news conference in Washington with the visiting Italian Prime Minister, offered condolences to the people of France after the shooting, saying it "looks like another terrorist attack".More news: New Trump Order Extends 'Buy American' And 'Hire American' Rules
None of the candidates immediately commented.
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