China, which claims the democratically-ruled island as its own territory, routinely denounces US arms sales to Taiwan.
Taiwan has requested to buy components to upgrade its Patriot missiles "in order to support an operational life of 30 years", the State Department said on Thursday.
Lockheed Martin will be the main contractor and the total estimated cost will be $620 million, it added.
"This proposed sale serves US national, economic, and security interests by supporting the recipient's continuing efforts to modernize its armed forces and to maintain a credible defensive capability," it said, Reuters reported.
"The recipient will use this capability as a deterrent to regional threats and to strengthen homeland defense. The recipient will have no difficulty absorbing this equipment into its armed forces."
Taiwan's Defense Ministry said it expected the sale to take effect within the next month.
"This arms sale is the 7th by the Trump administration to Taiwan so far, fully demonstrating the importance attached to our national defense security, consolidating our security partnership with the United States, and jointly maintaining peace and stability in the Taiwan Strait and the region," the ministry said.
Taiwan has been bolstering its defenses in the face of what it sees as increasingly threatening moves by Beijing, such as regular Chinese air force and naval exercises near Taiwan.
While Taiwan's military is well-trained and well-equipped with mostly US-made hardware, China has huge numerical superiority and is adding advanced equipment of its own such as stealth fighters.
