The victim was a history teacher, who just a few days earlier had shown caricatures of the Prophet Muhammad to his students.
A teacher has been decapitated outside his school near Paris, according to authorities.
French police responded to the suspected terrorist incident in Conflans-Sainte-Honorine on Friday, after witnesses claimed a man had hacked off the victim's head with a kitchen knife in broad daylight.
The suspect threatened police before fleeing the scene; he was chased to the nearby town of Eragny-sur-Oise.
There police claim he continued to threaten with a gun and refused to surrender; believing he may have been wearing an explosive vest, a bomb squad was also scrambled.
After he refused to drop his weapons, officers shot him dead. A rifle and knife were found alongside the body.
Sources told Le Parisien that the victim was a history teacher, who just a few days earlier had shown caricatures of the Prophet Muhammad to his students during a course on freedom of expression.
The publication said the suspect was just 18 years old, and of Chechen origin. He had allegedly posted a gruesome video of the severed head right before the fatal confrontation with police.
It was also reported he tweeted: "To Macron, the leader of the infidels, I executed one of your hellhounds who dared to belittle Muhammad".
Witnesses said he shouted "Allahu Akbar" — Arabic for God is great — before being shot dead.
In 2015, 12 people were killed when two gunmen opened fire at the offices of satirical newspaper Charlie Hebdo, over its publication of cartoons of Mohammed — considered blasphemy punishable by death by Islamic extremists.
After Friday's attack the publication — which is now based at a secret location for safety reasons — condemned the "horrific and revolting" act, in which "a teacher was murdered for exercising his profession by a religious fanatic".