The Nice attack followed an assault with guns and bombs on several locations in Paris in November 2015, which killed 130 and wounded hundreds, and the shooting at the satirical magazine Charlie Hebdo in January 2015.
Paris police spokeswoman Johanna Primevert told The Associated Press that the attacker targeted officers guarding the area near the Franklin Roosevelt subway station at the center of the shopping avenue popular with tourists.
Matthias Fekl, the French interior minister, paid tribute to the dead policeman and praised his colleagues who he said had prevented a bloodbath.
A French national, the man shot two officers in 2001 after being stopped by a police auto, according to the source. It saw the assailant getting off a auto and opening fire at officers inside another vehicle.
"The policeman fell down".
Brandet said that the police officers "avoided a blood bath".
"The perpetrator of the attack in Champs Elysees in central Paris is Abu Yussef the Belgian and he is one of the Islamic State's fighters", said an IS statement published by its propaganda agency Amaq.
With a record number of voters still undecided, analysts say the shooting could play into the narrative pushed by the far-right.
Tourists have been warned to go back to their hotels and to let family and friends know that they are safe.
Three French presidential candidates have halted their campaigns as Paris wakes up to yet another deadly attack, just days before a crucial vote that's still too close to call.
US President Donald Trump, in comments prior to Hollande's televised address, said that the violence in Paris "looks like another terrorist attack".
The incident comes after two men were detained by the French police two days ago. Raids and searches were ongoing, Molins said.
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. "They need more than our compassion".
Police at the scene said they were searching for a potential second assailant, and Interior ministry spokesman Pierre-Henry Brandet said it could not be ruled out that there was another or others involved.
She also canceled a minor campaign stop, and scheduled another.
France remains in a state of emergency and on high alert over possible terrorist attacks. The Islamic State group quickly claimed responsibility for the attack. The other two were seriously injured, as was one pedestrian, according to French authorities.