Macron said in a post on X that he will formalise the decision at the United Nations General Assembly in September.
The mostly symbolic move puts added diplomatic pressure on Israel as the war and humanitarian crisis in the Gaza Strip rages.
France is now the biggest Western power among than 140 countries to recognise a Palestinian state.
"The urgent thing today is that the war in Gaza stops and the civilian population is saved," Macron said.
The move has been denounced by Israel.
''We strongly condemn President Macron's decision," Israeli Prime Minister Benjamin Netanyahu said in a statement. ''Such a move rewards terror and risks creating another Iranian proxy, just as Gaza became. A Palestinian state in these conditions would be a launch pad to annihilate Israel — not to live in peace beside it."
The Palestinian Authority welcomed it. A letter announcing the move was presented to Palestinian President Mahmoud Abbas in Jerusalem, on Thursday.
''We express our thanks and appreciation" to Macron, Hussein Al Sheikh, the PLO's vice president under Abbas, posted. ''This position reflects France's commitment to international law and its support for the Palestinian people's rights to self-determination."
The French president offered support for Israel after the October 7, 2023 Hamas attacks and frequently speaks out against anti-Semitism, but he has grown increasingly frustrated about Israel's war in Gaza, especially in recent months.
"Given its historic commitment to a just and sustainable peace in the Middle East, I have decided that France will recognise the state of Palestine," Macron posted.
"Peace is possible."
France has Europe's largest Jewish population and the largest Muslim population in western Europe, and fighting in the Middle East often spills over into protests or other tensions in France.
France's foreign minister is co-hosting a conference at the UN next week about a two-state solution.
Last month, Macron expressed his "determination to recognise the state of Palestine," and he has pushed for a broader movement toward a two-state solution, in parallel with recognition of Israel and its right to defend itself.
Thursday's announcement came soon after the US cut short Gaza ceasefire talks in Qatar, saying Hamas wasn't showing good faith.
Momentum has been building against Israel in recent days.
Earlier this week, France and more than two dozen mostly European countries condemned Israel's restrictions on aid shipments into the territory and the killings of hundreds of Palestinians trying to reach food.
Macron will join the leaders of Britain and Germany for emergency talks Friday on Gaza, how to get food to the hungry and how to stop fighting.
"We are clear that statehood is the inalienable right of the Palestinian people. A ceasefire will put us on a path to the recognition of a Palestinian state and a two-state solution which guarantees peace and security for Palestinians and Israelis," British Prime Minister Keir Starmer said in announcing the call. "The suffering and starvation unfolding in Gaza is unspeakable and indefensible."
The Palestinians seek an independent state in the occupied West Bank, annexed east Jerusalem and Gaza, territories Israel occupied in the 1967 Mideast war.
In the West Bank, Israel has built scores of settlements, some resembling sprawling suburbs, that are now home to over 500,000 Jewish settlers with Israeli citizenship.
The territory's three million Palestinians live under Israeli military rule, with the Palestinian Authority exercising limited autonomy in population centres.