The move will ensure the bill raising the retirement age by two years to 64 - which the government says is essential to ensure the pension system does not go bust - is adopted after weeks of protests and fractious debate.
But it also shows President Emmanuel Macron and his government failed to garner a majority in parliament, in a blow to the centrist president and his ability to win support from other parties for further reforms.
Borne was greeted by boos and jeers as she arrived in the National Assembly, the lower house of parliament, to announce that she would invoke article 49.3 of the constitution to skip a vote on the reform measures.
The session was suspended for two minutes after left-wing lawmakers singing the national anthem prevented Borne from speaking. Some held placards reading "No to 64 years".
When the session resumed, Borne took the floor but her speech was largely drowned out by the same boos and chants.
"We cannot gamble on the future of our pensions, this reform is necessary," Borne told lawmakers, to explain why she was using the 49.3 procedure.
Far-right leader Marine Le Pen said Borne should resign. "This last-minute resort to 49.3 is an extraordinary sign of weakness," she said, adding: "She must go."
Asked about a possible resignation in an interview with the TF1 television evening news, Borne said she still had a lot of work ahead of her: "There is the energy crisis, the climate crisis and the Ukraine war is continuing," she said.
As she spoke, a spontaneous and unplanned protest of about 7,000 people against the reform continued into the night on the Place de la Concorde in Paris, across the river Seine from parliament.
Police fired tear gas and charged in an effort to disperse the crowd, as some protesters threw cobble stones. In several other French cities including Marseille there were also spontaneous protests against the reform.
French unions called for another day of strikes and action against the reform on Thursday March 23.
Strikes and protests
Opinion polls show that a vast majority of voters oppose the pension reform, as do trade unions, who say there are other ways to balance the accounts, including taxing the wealthy more.
The government's use of the 49.3 procedureis likely to further enrage unions, protesters and left-wing opposition parties who say the pension overhaul is unfair and unnecessary.
Socialist Party head Olivier Faure told Reuters earlier on Thursday that such a move could unleash "uncontrollable anger" after weeks of rolling strikes and protests that have hit power production, blocked some shipments from refineries and seen garbage pile up on the streets of Paris.
"We're as determined as ever," said CGT unionist Christophe Jouanneau at a refinery on strike in the western France city of Donges. "From next week on, we will take things up a gear."
Opposition parties said they would request a vote of no confidence in the government, which will be voted on in the coming days, possibly on Monday.
That is unlikely to pass as most conservative lawmakers would not be expected to back it - unless a surprise alliance of MPs from all sides is formed, from the far-left to the far-right and including the conservatives.
The government had initially said the reform would allow the system to break even by 2030, with 17.7 billion euros in additional annual contributions coming from pushing back the retirement age and extending the pay-in period.
It says the accounts will still be balanced in that timeframe, with additional income compensating measures agreed by Macron's camp to try to get LR's support, including a softener for those who started to work early and a top-up for some working mothers.