The election is the second to be held in the country with its incumbent President Nobel Peace prize laureate Jose Ramos-Horta running for reelection against 11 other candidates.
Saturday's election is seen as a key test for the young Asian nation's stability in the face of the looming withdrawal of the United Nations peace-keeping forces.
The elections were reported to be peaceful and orderly as voters troop to polling places to cast their votes.
"I have voted and I am confident that this country will gain peace, stability and prosperity," said 54-year old voter Mateus Da Costa.
More than half a million voters were expected to cast their votes out of the nation's 1.1 million population.
There are 12 candidates on the ballot but only three were seen as strong contenders
which include, Jose Ramos-Horta, former armed forces chief Taur Matan Ruak (or ''TMR'' as he is known), and former parliamentary speaker Francisco "Lu-Olo" Guterres.
Election observers from the international community were seen in the capital Dili, including large number of observers from Australia.
Media people covering the event reported the situation is calm
and there is relative peace in the country.