One of the gunmen involved in the incident - named as Abu Yusuf al Beljiki - has also been killed.

Police have since issued a warrant for a second suspect who had arrived in France from Belgium.

The Champs-Élysées would host road cycling events if Paris is chosen to host the 2024 Olympics and Paralympics in front of Los Angeles.

Interior Ministry spokesman Pierre-Henry Brandet told France's BFMTV news channel that the officers were "deliberately targeted".

Brandet said the shooter, who BFMTV sources claim was known to security services, pulled up alongside a police bus, got out and opened fire on the vehicle using an automatic weapon.

After killing one officer, he then injured two others.

French President Francois Hollande said tonight the incident was "terrorist in nature”.

So-called Islamic State have taken responsibility, claiming one of their "fighters" carried out the attack.

The area around the Champs-Élysées, one of the French capital's most iconic sites which is also a key part of Paris' bid for the 2024 Olympic and Paralympic Games, has been sealed off following the attack.

An anti-terrorist investigation has been launched by French authorities.

"Shortly before 9pm local time, at the level of 102 Champs-Élysées, a vehicle stopped next to a van of public order and traffic of the police prefecture, a police van which was stationary with officers inside the vehicle and on the pavement," Brandet said.

"Immediately, a man exited his vehicle and opened fire on the officers, fatally wounding one.

"The man then tried to run along the pavement, aiming at police officers. 

"He managed to wound two, very seriously.

"Two were wounded and others returned fire, killing the assailant. 

"The neighbourhood was immediately on shut down, with security forces and emergency services hurrying to the scene to secure the area."

The incident came prior to the first round of voting in the French Presidential Election, scheduled to be held on Sunday (April 23).

It happened amid heightened security in the French capital. 

Candidates Marine Le Pen, of the far-right National Front, and the centre-right's François Fillon have announced they will cancel campaign events scheduled for tomorrow in the wake of the attack.

"First of all, our condolences from our country to the people of France,” United States President Donald Trump said. 

“Again, it’s happening, it seems.

"I just saw it as I was walking in, so that’s a terrible thing.

“It’s a very, very terrible thing that’s going on in the world today. 

"But it looks like another terrorist attack and what can you say? 

"It just never ends. 

"We have to be strong and we have to be vigilant and I’ve been saying it for a long time."

The incident marks the latest terrorist attack on the French capital, the worst of which came in November 2015, where 130 people lost their lives in a series of coordinated assaults across the city.