He had retired aged 75 but helped out when necessary – and was reportedly standing in for the regular priest, Father Auguste Moanda-Phuati, when two men wielding knives burst into the church at 9.43am French time on Tuesday.
He was killed in front of two nuns and two worshippers after all five were taken hostage.
Speaking on RMC - a French radio station, Sister Danielle, who escaped the scene said: "They forced him to his knees. He wanted to defend himself. And that's when the tragedy happened."
"They recorded themselves. They did a sort of sermon around the altar, in Arabic. It's a horror," she later told BFM television.
Sister Danielle - who described the clergyman as a "great priest" - said she fled at the moment the attackers killed him.
Born in the Rouen area, Father Hamel was ordained in 1958 and was assistant priest in the parish of St Etienne.
His killing has prompted calls for a fast-tracked sainthood for murdered clergyman.
Italian politician Roberto Maroni urged the Pope to make the him ‘St Jacques’.
In an appeal circulated on social media, the president of the Lombard region said: “Father Jacques is a martyr of faith”.
The hashtag #saintosubito - #saintimmediately - began trending on Twitter as people expressed horror at the incident.
One neighbour told weekly French magazine L'Express: “This was a man who did his job to the very end. He was old, but always available for everyone. He was a good priest. He had been here for many years; he lived in the rectory here. Many parishioners knew him very well.”
A statement issued by the archdiocese of Rouen said. “This man was a good man.”
Eulalie Garcia, who works in a beauty parlour on the same road as the church, told reporters he had taught her about Catholicism as a young girl.
"My family has lived here for 35 years and we have always known him," she said.
"He was someone who was treasured by the community. He was very discreet and didn't like to draw attention to himself."
French newspaper Le Figaro reported the church was suspected to have been on a list of Catholic places of worship in the area around Paris drawn up as possible targets by Sid Ahmed Ghlam, an Algerian student arrested last year on suspicion of murdering a mother-of-one during a botched attempt to attack a church in Villejuif.
Confirming Father Hamel's death, the Archbishop of Rouen, Dominique Lebrun, who cut short a visit to Poland to return to his diocese, said: "I cry to God with all men of good will. The only arms which the Catholic Church can take up are prayer and brotherhood between men."
Archbishop Eamon Martin offers solidarity and condolences
The head of the Catholic Church in Ireland Archbishop Eamon Martin has written to Archbishop Dominique Lebrun, the Archbishop of Rouen, France, to express his shock, to offer condolences and to express the prayerful solidarity of the Church in Ireland following the horrific attack.
Archbishop Eamon said he was deeply moved by Archbishop Lebrun’s own words earlier today when he said that the “only weapons that we can take up” as Catholics “are prayer and fraternity among peoples” and his call for people “not to give up in the face of violence but to become apostles of the civilisation of love”.
Archbishop Eamon has assured Archbishop Lebrun of his prayers for the repose of the soul of Father Jacques, for those injured in the attack, and for the community of Saint-Etienne-du-Rouvray.
Attacker 'tried to go to Syria'
One of the men who attacked a Normandy church, killing an 85-year-old priest, twice used relatives' ID cards in attempts to reach Syria, France's anti-terrorism prosecutor has said.
Adel Kermiche, 19, was wearing an electronic surveillance bracelet when he and another attacker slit the throat of a priest in the town of Saint-Etienne-du-Rouvray, Paris prosecutor Francois Molins said.
Kermiche and the other assailant were killed by police.
Mr Molins said the bracelet was deactivated for a few hours every morning, corresponding with the time of the attack.
He said Kermiche was arrested in Germany in March 2015 trying to join extremists in Syria using his brother's ID, and was then arrested in Turkey two months later using a cousin's ID.