AFP reporters heard gunfire near the site and saw tanks on the street, while security sources reported that armed men had tried to overrun the complex.
The government later said 19 people were killed in the fighting, of which 18 were members of the 24-strong commando unit that launched the assault.
"There were 18 dead and six injured" among the attackers "and we suffered one death and three injured, one of them seriously", government spokesman and Foreign Minister Abderaman Koulamallah told AFP.
Hours after the shooting, Koulamallah appeared in a video posted to Facebook, surrounded by soldiers and with a gun on his belt, saying "the situation is completely under control... the destabilisation attempt was put down".
A security source said the attackers were members of the Boko Haram jihadist group, but Koulamallah later said they were "probably not" terrorists, describing them as drunken "Pieds Nickeles" -- a reference to a French comic featuring hapless crooks.
He said they attacked four guards before entering the presidential complex, where they were "easily overpowered", adding the surviving assailants were "completely drugged".
Landlocked Chad is under military rule and faces regular attacks by Boko Haram, especially in the western Lake Chad region that borders Cameroon, Nigeria and Niger.
It recently ended a military accord with former colonial power France and has been accused of interfering in the conflict ravaging neighbouring Sudan.
Several security sources said that an armed commando unit opened fire inside the presidency on Wednesday evening around 7:45 pm (1845 GMT), before being overrun by the presidential guard.
All roads leading to the presidency were blocked and tanks could be seen on the streets, according to an AFP reporter at the scene.
As civilians rushed out of the city centre in cars and motorcycles, armed police were seen at several points in the district.
Hours before the shootout, Chinese Foreign Minister Wang Yi met with President Mahamat Idriss Deby Itno and other senior officials.
Deby was in the complex at the time of the attack, according to Koulamallah.
- France's last Sahel bases -
The former French colony hosted France's last military bases in the region known as the Sahel, but at the end of November, Chad ended defence and security agreements with Paris, calling them "obsolete".
Around a thousand French military personnel were stationed in the country and are in the process of being withdrawn.
France was previously driven out of three Sahelian countries governed by juntas hostile to Paris -- Mali, Burkina Faso and Niger.
Senegal and Ivory Coast have also asked France to vacate military bases on their territory.
- Like father, like son -
The gunfire erupted less than two weeks after Chad held a contested general election that the government hailed as a key step towards ending military rule, but that was marked by low turnout and opposition allegations of fraud.
A call by the opposition for voters to boycott the polls left the field open for candidates aligned with the president, who was brought to power by the military in 2021 and then legitimised in a May presidential election that opposition candidates denounced as fraudulent.
Deby took power after the death of his father, who had ruled the country with an iron fist for three decades.
The desert country is an oil producer but ranked fourth from bottom in the United Nations Human Development Index.
To consolidate his grip on power, Deby has reshuffled the army, historically dominated by the Zaghawas and Gorane, his mother's ethnic group.
On the diplomatic front, he has sought new strategic partnerships, including with Russia and Hungary.
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