The masked raiders smashed display cases in a corridor near a high-end jewellery store inside the hotel after entering through the back door but their escape was foiled when security watching through CCTV triggered a lock jamming a rear gate, according to reports.
Meanwhile, police nearby rushed to the scene and detained three suspects after shooting them with tasers. The trio have been described as 'well-known hoodlums', who and French and aged in their 20s and they could face up to 15 years in prison.
But officers are still hunting two suspects who who fled in a moped and Renault Megane car.
According to reports the gang snatched £4million in jewellery but as yet it is not clear how much has been recovered.
Europe 1 reports, police are yet to make an inventory to determine how much was taken and how much jewellery was recovered at the scene.
Witnesses described 'total panic' after gunmen opened fire when storming the five-star hotel - on the world's most luxurious hotels and a popular destination for A-list celebrities and the super-rich.
An American told Mirror Online that the gunmen opened fire when they stormed five-star 'palace' - one of the most luxurious hotels in the world - which is popular with A-list celebrities and the super-rich.
She was having a drink in the famous Hemingway bar when panicked bartenders suddenly started shouting at guests to "get down" on the floor for their safety.
She said one of the suspects was wearing a ski mask and carrying an axe as a bartender locked the door and rushed guests into the kitchen where they took refuge from the attack.
The terrified guests then heard gunshots and screaming behind the locked door as the brazen raid unfolded, says the woman, who was left shaken.
A police source told Reuters: "The loss is very high and remains to be assessed."
Another said that a bag had been recovered possibly containing some of the loot.
The American tourist described an eerie sense of calm in the kitchen as people hid, with one woman so terrified that she became physically ill.
The tourist told Mirror Online: "My parents and I were sitting at the Hemingway bar at the Ritz for a drink and we were about to leave when we heard shouting from the bartenders to get down.
"One man wearing a ski mask ran from the bar door to the front of the bar right past my father. He had an axe in his hand.
"Immediately the bartender closed and locked the door and corralled everyone to the back kitchen area of the bar.
"We heard at least 10 rounds of gunfire so everyone dove behind the bar where we stayed there for about six minutes.
"We heard shouting and screaming from right outside the door. We were told there were robbers with guns and axes.
"They were after the jewellery on display at the hotel. I know the bar across from ours was shot through because I saw the door window and it was shattered."
She added: "I also saw one of the workers at the hotel had gotten shot in the leg.
The holidaymaker said of the injured employee: "He seemed to be fine but the paramedics were looking at him. He was sitting against the wall right outside the bar."
The tourist added: "When the robbers barged in everyone was kind of confused. The guy went right past my father and my father didn't really think anything of it.
A source inside the hotel said a female pedestrian was the only person injured: "A police patrol was close to the Ritz after the men arrived, and intercepted them as they tried to get out the back door of the hotel.
"Tasers were used to disabled three of the men, who had put up a struggle. They are well knownhoodlums who have been involved in this kind of thing before."
A man who was nearby when the robbery unfolded said he arrived afterwards but was told that gunshots were fired.
Police launched a major operation following the heist and there was a heavy presence of officers and security in and around the hotel in Paris' exclusive 1st arrondissement.
"Two others got out the back door of the hotel, and were seen running away, and then getting on mopeds."
Guests drinking in the Hemingway Bar, at the back of the hotel, first heard the commotion.
The source said: "Bar staff told everybody to remain calm, and not to do anything stupid. Some clients were ushered down into the basement for safety. Shots from what sounded like a handgun were heard at one point.
It was suggested that one theory that will be considered by investigators will be that the raid was carried out by the Pink Panthers – a notorious criminal gang mainly made up of ex-soldiers from Balkans countries such as Serbia.
The Panthers, who frequently carry out raids across France, got their nickname after hiding a £500,000 diamond stolen during a London raid in a jar of face cream.
This was a tactic used in the original 1963 Pink Panther film, starring Peter Sellers as Inspector Clouseau.
However, the Panthers are better known for using high-ends sports cars rather than mopeds, and usually plan their raids down to the last detail.
It would be highly unusual for three of them to be arrested during a robbery.
Security around the hotel, on the right bank of the river Seine, was heightened following a series of daylight robberies in the area in 2014.
Last May, three armed robbers stole five million euro (£4.4 million) worth of jewellery in a raid at a Buccellati shop which is just 100 metres from the Ritz.
Founded in 1898 by Swiss hotelier César Ritz, the hotel was the first in Paris to boast electricity on all floors and bathrooms that were inside rooms.
It reopened in 2016 following an extensive four-year renovation and a fire.
The Ritz is a favourite retreat for the rich and famous, and is owned by Egyptian businessman Mohamed Al-Fayed, the father of Dodi Al-Fayed, who died in a car crash along with Princess Diana in August 1997.
The couple had dined in the hotel's Imperial Suite shortly before they were killed.
The hotel is next door to France’s Justice Ministry, where soldiers stand guard 24 hours a day.
Celebrity residents over the years have included fashion designer Coco Chanel and author Marcel Proust.