The US government has notified Taiwan of the sale at a price of 40 million US dollars of two Perry-class frigates about to be retired from the US Navy, Taipei's Apple Daily said, citing a defence ministry source.
Taiwan's navy said it had not yet received information about the reported frigate sale.
"Taiwan's navy already operates a fleet of eight such frigates, but it has launched a five-year buildup beginning from 2008," naval spokesman Hsia Yu-teh told AFP.
Taiwanese media have said the planned buildup includes eight conventional submarines, as well as an undisclosed number of frigates and guided-missile patrol boats.
Tensions across the Taiwan Strait have eased significantly since President Ma Ying-jeou of the China-friendly Kuomintang party came to power in 2008, pledging to boost trade links and allow in more Chinese tourists.
But Beijing still refuses to rule out the use of force against Taiwan should it declare formal independence, prompting the island to seek more defensive weapons.
The island has governed itself since it split from the mainland in 1949 at the end of a civil war.
China has reportedly increased its missiles aimed at Taiwan from 300 in 2001 to 1,400 in 2008.
Washington announced in January a weapons package for Taiwan that includes Patriot missiles, Black Hawk helicopters, and equipment for Taiwan's F-16 fighter jets, but no submarines or new fighter aircraft.
Beijing reacted angrily to the arms deal, halting military and security contacts with the United States.
Source: AFP American Edition