The Thursday evening attack took place in the city’s Champs-Elysees district, which is hugely popular with tourists and shoppers. It saw the assailant getting off a car and opening fire at officers inside another vehicle.
The shots hit three policemen. One died on scene, while two others were seriously injured.
The gunman was later shot dead by police.
The Takfiri terror group of Daesh's Amaq news agency claimed responsibility for the attack, identifying the attacker as “Abu Yousif, the Belgian.”
French Interior Ministry spokesman Pierre-Henry Brandet said in televised remarks that the officers were "deliberately" targeted in the incident.
The Paris prosecutor's office said the incident was being probed and that the investigation involved counterterrorism officials.
Paris police spokeswoman Johanna Primevert told The Associated Press that the attacker appeared to be acting alone.
Witness accounts also described the assailant as a lone gunman. Reuters cited a police source as saying that the law enforcement had issued an arrest warrant for a second suspect in the shooting, who had arrived from Belgium by train.
Police vehicles barricaded a local avenue and subway stations were sealed off.
Shortly after the deadly attack, French President Francois Hollande said security forces will be exercising the utmost vigilance, especially given the imminence of the country's presidential election process.
The assault served as a poignant reminder of the terror strikes hitting the French capital over the past years, which claimed the lives of dozens of people.
The attacks were claimed by Daesh, which is mainly active in Syria and Iraq.
Thursday's attack came three days before the first round of balloting in France's tense presidential election, hotly disputed by far-right candidate Marine Le Pen.
She has vowed a tough line on immigration, blaming it for the violence preying on France.
Prior to the Thursday incident, observers had warned that potential terrorist attacks would play well into her hands.