The ruling was handed down by the Strasbourg-based Council of Europe, which said France's laws on corporal punishment for children were not "sufficiently clear, binding and precise".
France bans violence against children in school and disciplinary establishments, but does allow parents the "right to discipline" their children.
The French government has already suggested it will ignore the Council of Europe's decision, which doesn't oblige France to make any change in the law.
The Council of Europe, wants all of its 47 members to ban corporal punishment of children, but so far, only 27 have banned the practice.
The Council of Europe's ruling follows a complaint lodged by Britain-based child protection charity Approach, which says that French law violates part of the European Social Charter, a treaty first adopted in 1961 and revised in 1996.
Graph: Where is smacking banned in the world?
Even before the judgement, the controversy around smacking has been revived in France, with the minister for families Laurence Rossignol calling for a "collective debate" about "the usefulness of corporal punishment in the education of children."
However, this will "not be enshrined in the law", Rossignol told AFP, so as not to "cut the country into two camps — for and against smacking."
"For abusive parents, we have a penal code. For those that occasionally resort to corporal punishment, we need to help them do things differently and not discredit them by saying 'the judge is coming to deal with that'," added the minister.
Rossignol's view has been backed by other politicians and family groups and polls also indicate that there is strong support in France for the right of parents to smack their children.
Graph: How many countries in the world have banned smacking?
“Do you really think that we will be able to put a policeman in with every family? It’s absolutely absurd,” said Thierry Vidor, director of Familles de France told The Local.
"Bringing this under the rule of law is not the right solution. It's more important to have a set of educational messages and guidelines to help parents raise their children," he said.
"Imagine the havoc it would cause if there is the possibility your child will report you to police. Imagine how that would impact on a family, not just for the parents, but for the children who would feel guilty for reporting their parents," he said.
“For some families spanking (la fessée) can be a way to deal with a crisis – a kind of shock, a way for them to manage in some cases,” he said.
Vidor says that a slap on the wrists or little tap on the bottom cannot be judged as physical abuse.
A former education minister for the opposition UMP party dismissed the latest debate around smacking.
"Is this really the debate of the century? Stop it, there are more important subjects," said Luc Chatel.
Another opposition politician, Jean-Christophe Lagarde, said it was "ridiculous" to introduce laws that governed family life to that extent.
"Are we going to be told how to stack our plates, whether children should be made to dry up and whether they can help their parents with the chores?" he asked.
Groups calling for a ban however accuse the government of simply “lacking courage”.
"Fewer and fewer parents are smacking children in France, but without a new law, the change will only happen slowly," Olivier Maurel, founder of the anti-corporal punishment organisation Oveo, told The Local.
"Without that law in place there will always be parents who take advantage and hit children harder and more often than the current law permits,"
"After they banned smacking in Sweden [in 1979] the rate of child deaths caused by abuse has dropped to 0.6 percent per 100,000 in France it remains at 1.4 per 100,000."
Another expert on the matter, Dr Gilles Lazimi from the Foundation for Childhood, said: "The French government is acting in the interests of the adults and not of the children. It's scandalous".
More than half of the 47 members of the Council of Europe, including Germany, the Netherlands and Spain, have completely banned smacking.
Other big European countries, such as Britain, either have similar laws to France or have not adopted concrete regulations on the issue.
Worldwide, 17 other countries have a complete ban on corporal punishment for children, notably in South America, Central America and Africa.