Taiwan will spend close to NT$240 billion (289 billion baht) on eight types of weapons to help boost its defences in the face of growing military threats from Beijing.
Military observers said the weapons, to be built by the self-ruled island, included missiles capable of striking coastal and inland mainland China.
The island's lawmaking body approved the NT$237 billion, five-year spending plan on Tuesday as a special military budget that would need to be raised through government borrowing, according to the public information released by the legislature.
It came on top of a record NT$471.7 billion defence budget for this year.
The special funds would be used to mass-produce precision and long-range missiles as well as naval ships to bolster the island's sea and air defences, according to a defence ministry budget report.
Citing growing military intimidation from Beijing, which has staged exercises nearby and sent warplanes to Taiwan's air defence identification zone almost daily, the report said it was necessary for Taiwan to fortify its defences, especially given warnings from the outside world that the People's Liberation Army could attack the island this decade.
During a US Senate hearing in March, then head of the US Indo-Pacific Command, Admiral Phil Davidson, warned that the PLA could invade Taiwan within the next six years.
Taiwan has also been described by the British magazine The Economist as the most dangerous place on Earth because of Beijing's growing impatience over the prospects for cross-strait unification. If mainland leaders deemed peaceful unification impossible, they might try to take Taiwan by force, the magazine warned.
In October, Taiwanese Defence Minister Chiu Kuo-cheng admitted that the PLA would be able to mount a full-scale invasion of the island by 2025, while keeping the cost of such a conflict at a minimum.
Beijing considers Taiwan a wayward province that must be brought back to the mainland fold, by force if necessary.
It has become increasingly annoyed by Taiwan's inaction towards its proposal for peaceful cross-strait union under the one-China principle as well as the island's deepening partnership with Washington in countering Beijing.
Under the special budget, the military will spend NT$79.7 billion on shore-based anti-ship missile systems, NT$34.7 billion on land-based anti-air systems, NT$17 billion on the Hsiung Sheng surface-to-surface missile project, NT$12.6 billion on Wan Chien air-to-ground cruise missiles, and NT$8.9 billion on field-based anti-air missile systems.
The shore-based systems include the supersonic Hsiung Feng 3 missile and its extended range version, while the land-based systems include surface-to-air anti-ballistic Tien Kung 3 missiles, and the field-based systems include the medium-range, radar guided anti-air Tien Chien 2 missiles.
In addition, NT$12 billion will go to an attack drone project, NT$69.2 billion to a high-performance ship project and NT$3.2 billion to a wartime weapon system for the island's coastguard, according to a budget table listed by the Directorate General of Budget, Accounting and Statistics.
Most of the funding for the high-performance naval ship project would be used to buy 10 more Ta Jiang stealth missile corvettes, according to the directorate general.
The navy commissioned the first Ta Jiang-class corvette in September. Built by Lung Teh Shipbuilding, the Ta Jiang - dubbed the “carrier killer” - has the ability to strike larger warships.
Observers said the missiles and the high-performance ships were designed to play a key role in the island's asymmetric warfare strategy to counter the much large force the PLA could muster.
"These systems are not only highly mobile but are also powerful enough to form a deterrence force against the PLA," said Su Tzu-yun, a senior analyst of the government-funded Institute for National Defence and Security Research.
"Some of the missiles, including the Hsiung Sheng, are capable of reaching coastal and inland areas of China."
The Hsiung Sheng surface-to-surface missile reportedly has a range of 1,200km, putting the cities of Nanjing and Wuhan within striking distance.
Su said the Wan Chien, with a range of some 240km, was designed for suppression attacks on mainland Chinese airfields, ports, missile sites and radar positions.
Chieh Chung, a national security researcher at the National Policy Foundation, a Kuomintang party think tank, said the Ta Jiang was equipped with Hsiung Feng 2 and 3 anti-ship missiles and Hai Chien 2 anti-aircraft missiles developed by the National Chung-Shan Institute of Science and Technology, the island's top weapons builder.
"The corvette is designed to cope with large PLA ships and, with its stealth function and high mobility, it is difficult to track and is capable of hit-and-run tactics," he said.
Separately, Taiwan's air force said in late March that it was seeking to buy Patriot Advanced Capability 3 (PAC-3) Missile Segment Enhancement interceptors from the United States to counter a growing threat from across the Taiwan Strait.
Military experts said the PAC-3 had a longer range and greater accuracy than the PAC-2 and PAC-3 systems Taiwan had deployed.