With almost all of the 47 million ballots counted, the leader of the far-right Front National (FN) had secured 21.6 per cent of the vote. She will face centrist Emmanuel Macron, the former Socialist minister who set up his own party to run for president. He won the first round with about 23.8 per cent.
Mr Macron is now the clear favourite to triumph in the second, and final, round in two weeks, according to polls.
The vote marks the end of a political era with the two major parties, the Socialists and centre-right Les Republicains, which have traditionally been the pillars of France's political arena, both being eliminated in the first round.
Conservative Francois Fillon was on just under 20 per cent of the vote, marginally ahead of far-left candidate Jean-Luc Melenchon on 19.5 per cent. Socialist candidate Benoit Hamon was set to pick up an historically low 6.3 per cent.
According to the latest polling about voters' intentions in the second round, Mr Macron is forecast to beat Ms Le Pen by 62 per cent to 38 per cent, with many political figures quick to join the 'anyone but Le Pen camp'.
Conceding defeat, Mr Fillon asked his supporters to back Mr Macron in the second round of voting on 7 May, urging them to keep Ms Le Pen away from the presidency.
"Despite all my efforts, my determination, I have not succeeded in convincing my fellow countrymen and women. The obstacles in my path were too numerous and too cruel. This defeat is mine, I accept the responsibility, it is mine and mine alone to bear," Mr Fillon told his supporters.
"Extremism can only bring unhappiness and division to France. There is no other choice than to vote against the far right. I will vote for Emmanuel Macron. I consider it my duty to tell you this frankly. It is up to you to reflect on what is best for your country, and for your children."
As for Mr Melenchon, he said he would not endorse any candidate for the second round.
Mr Macron said the vote showed that the election meant "turning a page in French political history" and that he wanted to gather "the largest possible support" before the run-off.
The frontrunner called for hope in Europe in stark contrast to Ms Le Pen, who campaigned to leave the European Union (EU).
Mr Macron said the EU would have to be reformed and revived with a project "which protects" and offers a place to every French citizen.
Addressing her supporters in the town of Hénin-Baumont, an FN stronghold, Ms Le Pen said the first hurdle towards the Elysée Palace had been overcome.
She hailed the results as “historic” and warned “the survival of French civilisation” was now at stake.
European leaders made clear who they wanted the next French president to be.
A spokesman for European Commission chief Jean-Claude Juncker, Margaritis Schinas, tweeted that Mr Juncker had congratulated Mr Macron and wished him good luck for the second round.
German Foreign Minister Sigmar Gabriel also welcomed the success of Mr Macron and said he was sure the centrist would become the next French president.
Mr Gabriel tweeted: "Felicitations a @EmmanuelMacron. Vive la France, vive l'Europe!"
In an usual move, Mr Gabriel said he would continue to do all he could to support Mr Macron.
Mr Gabriel said: "He was the only really pro-European candidate who didn't hide behind stereotypes about Europe. I'm certain that he will put right-wing radicalism, right-wing populism and anti-Europeans in their place in the second round."
His comments were echoed by Martin Schultz, the Social Democrat who will challenge Angela Merkel in Germany's federal election in September. He said he hoped Mr Macron would win the second round with a broad majority to defeat the "anti-European and openly racist candidate Marine Le Pen".
Gunther Krichbaum, a member of Ms Merkel's conservatives and the head of the parliamentary European affairs committee, said Mr Macron's results were "a valuable sign" for German-French cooperation. He also said he was alarmed that the combined projected votes of Ms Le Pen and Mr Melenchon, who are both critical of European integration, totaled about 40 per cent.
Downing Street told The Independent it would not comment on the results.
It is the second time the FN has made it to the final round of a presidential election after the party’s founder Jean-Marie Le Pen went head to head with conservative Jacques Chirac in 2002.
Supporters of Ms Le Pen were quick to hail her at the hall where she gave a speech celebrating the fact she made it through. The packed crowd waved flags and shouting "We will win!"
Quentin Leclerc, 22, a history student said: “Marine Le Pen is making history after Brexit [and] Donald Trump.
“The second round is another battle but we are prepared."
Michèle Lojanne, who came with her 16-year-old son, said: “Really happy she is in the second round."
Louise-Marie Le Maire, 50 and unemployed, said it was “a pity that she is not first but the right wing takes a slap".
Marion Maréchal Le Pen, Marine’s niece and a FN MP called Ms Le Pen’s progression to the second round run-off “a historic victory for patriots and sovereignists”.
In Paris, others were not so happy. Police fired tear gas on the Place de la Bastille in eastern Paris as crowds of young people, some from anarchist and anti-fascist groups, gathered to protest at Ms Le Pen’s second-place finish and her anti-immigrant policies. They were a number of arrests
The fact that results are so close to end of the count is unsurprising given it was one of the most open election campaigns in recent memory with four candidates all in with a chance of progressing according to the polls before election day.
“Very interesting election currently taking place in France,” tweeted the US President Donald Trump, who has previously spoken of his admiration for strict anti-immigrant security measures proposed by Ms Le Pen. It was perhaps the understatement of the day.
The presidential poll was the first to be held during a state of emergency, put in place since the Paris attacks of November 2015. More than 50,000 police and gendarmes were deployed to the 66,000 polling stations across the country.
Among the first of the candidates to step out earlier in the day was Ms Le Pen, who cast her vote at the Jacques Rousseau primary school in Hénin-Beaumont, the town she would celebrate in later.
Situated in the Nord-Pas-de-Calais region, a stronghold for her party, there was a heavy police presence at the polling station and the roads around the school were closed.
Shortly before her arrival however, topless demonstrators from the Femen activist group were detained at the polling station after jumping out of an SUV limo wearing masks of Ms Le Pen and Mr Trump.
Elsewhere a voting station in eastern French town of Besancon was evacuated after reports of a suspicious vehicle.
Interior Ministry spokesman Pierre-Henry Brandet said that explosives experts examined the car, but they deemed there to be no risk.
Turnout was just under 80 per cent across the country, but given the close nature of the result, and the fact that polls suggested around 20 per cent of voters could abstain from voting, Ms Le Pen was not the only candidate receiving support among voters in Hénin-Beaumont,
Arlette, 79 and retired, told The Independent she has always lived in Hénin-Beaumont but was considering not voting “after the show the 11 candidates put on during the campaign”. But in the end she turned out to vote for Marine Le Pen. Robert, another retiree, came to greet her. He was also going to vote but said he was “sickened”, because it was always “the same speech, the same system” offered by the main contenders. To try to change things, he said, he would vote “for a small candidate” - the trade unionist Philippe Poutou.
Justine, 26, a cashier who has never voted before, decided to give her support to Marine Le Pen. She made her choice because of the terrorist threat that hangs over France, she said. “If she [Le Pen] can do what she said she would concerning the 'fichés S' (a terrorist threat register) and to control borders, it would be a good thing,” she said. Jérémy, 37, also voted Marine Le Pen to “block Macron and Mélenchon”.
However, with Mr Macron and Ms Le Pen having make it through to the final round, whoever wins will face difficulties even after the 7 May run-off.
Parliamentary elections are to be held in June, with the make up of the MPs in the lower house set to determine how the winner of the election can govern. Mr Macron, who will be fielding candidates from his new En Marche! movement, will need quite a board coalition, while Ms Le Pen will want to see an increase on the current two FN MPs, but she may find herself stymied when it comes to trying to form a majority.