The outcome, if confirmed by the results of the second round, will herald a major political and fiscal upheaval in the European Union's current arrangement, in which Sarkozy figures as the leading partner of German Chancellor Angela Merkel in the EU fiscal discipline compact.
The compact aims to bring EU members into line with a policy of restraining expenditure and penalizing countries that fail to toe the line. Hollande has said the austerity straitjacket isn't working and, if elected, he will seek a major policy change to stimulate European growth.
Hollande's chances of winning the runoff improved after centrist Francois Bayrou, who was a minister with Sarkozy in the 1990s, said he would vote for Hollande.
Opinion polls indicate Hollande is leading Sarkozy into the runoff vote.
Commentators said the president damaged his constituency by panicking after the first round and lurching to the right in a bid to win over far-right and right-wing voters who rallied behind National Front leader Marine le Pen.
Le Pen told supporters not to fall for Sarkozy's ruse and urged them not to vote for either Hollande or Sarkozy. Last week the National Front was being labeled the kingmaker after finishing third in the first voting round but this week the polls gave the socialists a comfortable lead.
Bayrou, who was education minister when Sarkozy was communications minister from 1993 to 1995, said he was voting for the Socialist candidate because of Sarkozy's rightward shift after the first round April 22.
Bayrou, who polled fifth in the vote, said his decision was personal and he didn't urge his supporters to vote for Hollande.
"I, personally, will vote for Francois Hollande," he said. "After a good result in the first round, Nicolas Sarkozy set off in chase of an extreme right within which we do not recognize our values and in which our deepest and most precious beliefs are battered and denied."
Sarkozy called Bayrou's decision "illogical."
A confident Hollande said he would seek to change the EU economic strategy and stimulate growth.
"It is not for Germany to decide for the rest of Europe," he said. "We're not just any country, we can change the situation."
The Sarkozy-Merkel partnership earned the incumbent taunts of "Merkozy," leading Sarkozy further to appear to distance himself from Merkel, even as she went public with her support for his re-election.
However, Merkel aides were reported to be in great discomfort over Sarkozy's last-minute switch to a strident anti-immigrant and protectionist rhetoric.