According to Reuters, the so-called Islamic State has claimed via the Amaq news agency that one of its "fighters" carried out the attack, naming him as "The Belgian".
SITE Intel, a USA -based organization that monitors worldwide terror groups reported ISIS' claims of responsibility for the attaack that came came days before the first round of the French presidential election.
The shooting, which occured just three days before the most tightly contested presidential election in living memory is being investigated by the counter-terrorism office.
The attacker, who was not identified, was killed by officers returning fire after he aimed at police and fired multiple shots before 9:30 p.m. local time, The Guardian reported. "Some were crying. There were tens, maybe even hundreds of them". It saw the assailant getting off a auto and opening fire at officers inside another vehicle.
The attacker armed with a Kalashnikov parked his Audi behind a police van, then got out and opened fire on the vehicle, according to a witness called Chelloug who said he heard six shots.
Paris police and soldiers have sealed off the area around the Champs-Elysees after an attack on police, ordering tourists back into their hotels and blocking people from approaching the scene.
Because of its worldwide renown and its large number of visitors, the Champs Elysees has always been seen as a potential target, the BBC's Hugh Schofield reports from the French capital.
The source said French investigators now believe this was in all likelihood a terrorist attack.
President François Hollande said he was convinced the incident was a terrorist attack.
At least three underground train stations of the Paris Metro - the Champs-Elysees-Clemenceau, George V and F. Roosevelt stations - have been "closed off" near the site of the police operation on the Champs-Elysees in Paris, BFMTV reports. People have been told to say away from the area, which includes the shopping district popular with tourists.
After the loud bangs, she says: 'A sudden noise where we were was mistaken for gunfire and had police shouting us off the street. However, the French Interior Ministry says it is too early to give a clear motive for the attack. Just two days ago French authorities arrested two men in Marseille who were allegedly planning an attack in a run-up to the election.
Donald Trump has offered his condolences to the people of France saying it looks like another terrorist attack.
A French television station hosting a televised event with the 11 candidates running for president briefly interrupted its broadcast to report the shootings.
None of the candidates immediately commented.