Presided by Spanish auteur Pedro Almodovar, the Cannes jury awarded the best director prize to American director Sofia Coppola for her drama "The Beguiled".
The last female director to win was Yuliya Solntseva, a Russian director who earned the award for her 1961 drama "Chronicle of Flaming Years".
In addition to Kidman, Coppola's film stars Colin Farrell, Elle Fanning, Kirsten Dunst, Angourie Rice and Oona Laurence.
The Cannes Film Festival's jury made its choice, the victor is Ruben Ostlund's Swedish comedy "The Square". "There is a strength in my character, Katja, that frankly I wasn't sure I had in me, and, you know, Fatih saw (it) and he held my hand and helped me through this", she said.
The Camera d'Or, awarded to best first film from any section of the entire festival, went to Leonor Serraille for Jeune femme (Montparnasse-Bienvenue), which premiered in Un Certain Regard.
Joaquin Phoenix was named best actor for his role in Lynne Ramsay's thriller You Were Never Really Here, in which he played a tormented war veteran trying to save a teenage girl from a sex trafficking ring.
Swedish director Ruben Ostlund with the Palme d'Or for his film The Square, a satire on the art world.
Diane Kruger won best actress and Joaquin Phoenix best actor in the 70th anniversary for the legendary festival.
Toni Erdmann director Maren Ade, who also sat on the jury, agreed more female directors were needed, adding: "We're missing a lot of stories they might tell".
Australian actor Nicole Kidman won the Cannes film festival's 70th Anniversary Award.
The movie features Elisabeth Moss (Mad Men) and Dominic West (The Wire) in small roles viciously lampooning the self-important art world. The festival's most esteemed award, the Palme d'Or, hasn't been accepted by a woman since 1993, when Jane Campion won for her work on The Piano.
She suggested that more women filmmakers and storytellers be included for consideration in competition in the future.
His voice cracked as he commented on Robin's film delving into the Aids crisis in 1990s Paris and the lack of government support for sufferers. To much applause, the French director paid tribute to those "those who have died but even more to those [AIDS and HIV patients] who are still here, undergoing heavy treatments and putting their lives on hold".