Lagarde denies the charges of negligence, arguing she was acting "in the state's interest" in making the payment to Bernard Tapie, the former owner of sportswear giant Adidas and Olympique Marseille football club.
If found guilty, Lagarde could receive a one-year prison sentence and a 15,000 euro ($15,900) fine.
Whatever the outcome, the case risks damaging the image of 60-year-old Lagarde, a former corporate lawyer who progressed through the finance ministry to her current role as one of the world's most powerful women.
The case also threatens the credibility of the International Monetary Fund, whose last three managing directors have faced trial.
Lagarde, who was named to a second term in February this year, has received the full backing of the IMF over the case.
She will be tried by the Court of Justice of the Republic, a tribunal that hears cases against ministers accused of wrongdoing in the discharge of their duties.
Published : December 10, 2016
By : Agence France-Presse Paris