The sale includes $355million (£308m) for Harpoon air-to-sea missiles and $85million (£73million) for Sidewinder air-to-air missiles, the State Department said.
A $655million (£570million) logistics support package for Taiwan’s surveillance radar program is the biggest portion of the sale.
The State Department said the equipment is necessary for Taiwan to “maintain a sufficient self-defense capability.”
The administration also urged Beijing “to cease its military, diplomatic, and economic pressure against Taiwan and instead engage in meaningful dialogue with Taiwan.”
Following the announcement of the arms deal, Liu Pengyu, spokesperson for the Chinese embassy in Washington, said the arms sale “severely jeopardises China-US relations and peace and stability across the Taiwan Strait.
Adding: “China will resolutely take legitimate and necessary counter-measures in light of the development of the situation.”
Laura Rosenberger, the White House’s senior director for China and Taiwan, said that as China “continues to increase pressure on Taiwan — including through heightened military air and maritime presence around Taiwan — and engages in attempts to change the status quo in the Taiwan Strait, we’re providing Taiwan with what it needs to maintain its self-defense capabilities.”
The acrimony between the US and China over Taiwan has ramped up since House Speaker Nancy Pelosi visited the island last month.
Since then, there have been at least two other congressional visits and several by governors of US states, all of which China has condemned.
On Thursday, Taiwan’s military said it shot down a drone hovering over one of its island outposts just off the Chinese coast in an incident that underscored the heightened tensions.
A day earlier, Taiwan said it had warned off drones hovering over three of the islands it occupies off the coast of the Chinese port city of Xiamen.
The US described Chinese drills following Ms Pelosi’s visit last month as a severe overreaction and responded by sailing two guided missile cruisers through the Taiwan Strait, which China has declared to be its sovereign waters.
China claims Taiwan as its own territory. The sides split after a civil war in 1949 and have no official relations, with China cutting off even informal contacts following the election of independence-leaning Taiwanese President Tsai Ing-wen in 2016.