We present a novel first principles molecular dynamics scheme, called Liouville-von Neumann molecular dynamics, based on Liouville-von Neumann equation for density matrices propagation and Magnus expansion of the time-evolution operator. The scheme combines formally accurate quantum propagation of electrons represented via density matrices and a classical propagation of nuclei. The method requires a few iterations per each time step where the Fock operator is formed and von Neumann equation is integrated. The algorithm (a) is free of constraint and fictitious parameters, (b) avoids diagonalization of the Fock operator, and (c) can be used in the case of fractional occupation as in metallic systems. The algorithm is very stable, and has a very good conservation of energy even in cases when a good quality conventional Born-Oppenheimer molecular dynamics trajectories is difficult to obtain. Test simulations include initial phase of fullerene formation from gaseous C(2) and retinal system.