The film, which is Ducournau's second feature, tells the story of a young female killer who has sex with cars after surviving a childhood crash.
The award was prematurely revealed by US director Spike Lee at the beginning of Saturday's ceremony.
The jury president let the big secret slip, before telling the audience: "I apologise for messing up."
Ms Ducournau was still emotional when her film was officially announced as the winner, adding: "This evening has been perfect because it's been imperfect."
Titane had split critical opinion and has been described as one of the most shocking ever shown at the festival.
Cannes was the first full-scale film festival to take place since the start of the pandemic.
Last year's event was cancelled. The last film to take the Palme d'Or was Bong Joon Ho's Parasite in 2019, which later swept the award circuit and won Best Picture at the 2020 Academy Awards.