The second round vote pits 88-year-old favourite Beji Caid Essebsi, leader of the anti-Islamist Nidaa Tounes party, against incumbent Moncef Marzouki, who held the post through an alliance with the moderate Islamist movement Ennahda.
Ahead of the landmark vote, which sets Tunisia apart from the turmoil of other Arab Spring countries, jihadists issued a videotaped threat against the North African state's political establishment.
It is the first time that Tunisians have freely elected their president since independence from France in 1956.
Polls opened at 8:00 am and were due to close at 6:00 pm (1700 GMT).
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The result is due to be announced between tomorrow and Wednesday.
A first round held on November 23 saw Essebsi win 39 percent of the vote, six percentage points ahead of Marzouki, a 69-year-old former rights activist installed by parliament two months after December 2011 polls.
The vote is the country's third in as many months, after Nidaa Tounes won an October parliamentary election, making Essebsi favourite to be the next president, but with powers curbed under constitutional amendments to guard against a return to dictatorship.
Essebsi insists that Marzouki represents the Islamists, charging that they had "ruined" the country since the 2011 revolution which toppled veteran ruler Zine El Abidine Ben Ali and gave birth to the Arab Spring.
Marzouki in turn accused Essebsi, who served as a senior official in previous Tunisian regimes, of wanting to restore the old guard deposed in the revolution.