Taipei calls for international support as Beijing intensifies pressure on self-ruled island, which it claims as own.
Taiwan will get the latest version of the Lockheed Martin-built fighter, the F-16C/D Block 70, in the $8bn deal, the State Department announced on Tuesday.
Before the announcement, US President Donald Trump declared that “somebody had to take China on”.
Secretary of State Mike Pompeo said in a statement that Trump had green-lighted the proposed sale after Congress was notified last week.
The F-16s “are deeply consistent with the arrangements, the historical relationship” between the US and China, Pompeo said.
“Our actions are consistent with past US policy. We are simply following through on the commitments we’ve made to all of the parties.”
The sale also includes 75 General Electric Co engines, as well as other systems.
US Senate Foreign Relations Committee Chairman Jim Risch, a Republican, welcomed the sale, saying “these fighters are critical to improving Taiwan’s ability to defend its sovereign airspace, which is under increasing pressure from the People’s Republic of China”.
Taiwan’s plan to upgrade its air defences comes amid increasing Chinese military incursions into its airspace.
Beijing regards Taiwan as a part of China awaiting reunification, but the island is self-ruled and is a close ally of the US.
In a statement, the Defense Security Cooperation Agency, which oversees US foreign military sales, said Taiwan’s purchase of the F-16s “will not alter the basic military balance in the region”.
“This proposed sale will contribute to the recipient’s capability to provide for the defense of its airspace, regional security, and interoperability with the United States.”
Al Jazeera’s Gabriel Elizondo, reporting from Washington, DC, said that if the sale goes through, it would be the biggest military purchase by Taiwan in more than 20 years.
“This is part of the Trump administration’s plan to get closer relations with Taiwan. The Trump administration sent high-level visitors to Taiwan, opened diplomatic offices in Taipei, and the Trump administration supported pro-Taiwan legislation,” he said.
“This arms sale is the most high-profile act of supporting Taiwan, and it certainly is going to upset the Chinese.”
On Tuesday, the state-owned publication China Daily said the sale sends an “erroneous signal” to Beijing.
A senior foreign ministry official was also quoted as saying that “nobody should underestimate” the will of China “to safeguard our sovereignty and territorial integrity”.
On Monday, China’s Foreign Ministry spokesman Geng Shuang said US arms sales to Taiwan “severely violate” agreements between Washington and Beijing and “constitute severe interference in China’s internal affairs”.
The US should “immediately cancel the planned arms sales, and stop selling weapons and military contact with Taiwan”, he said.
“Otherwise, the US will have to bear all the consequences.”
Taiwan already has a fleet of old-model F-16s procured in 1992, which have undergone several crucial upgrades.
Manufacturer Lockheed Martin says the newest version, the F-16 Block 70/72, includes many avionics, weapons and radar technologies not in existence when earlier models were created.
It is structurally stronger, the company says, so that it “can fly and fight to 2070 and beyond”.
The approval of the sale comes as Washington and Beijing face off in tough trade negotiations that economists say are hurting both of the superpowers, as well as dragging down the global economy.