Production of the Tienkung III (Sky Bow III), the most advanced model in a line of locally-developed air defence missiles, is slated to last from 2015 until 2024.
Parliament recently approved the budget for the USD 2.5 billion project.
"The missile is capable of intercepting short-range ballistic missiles, cruise missiles and fighter jets," a senior official in charge of the missile project at Chung-Shan Institute of Science and Technology, the island's arms development hub, told AFP.
The institute also released a video to reporters visiting the tightly-guarded compound in northern Taiwan.
In the short film two Tienkung III missiles were fired from vertical launchers at the Chiupeng air base, soaring into the sky and destroying targets.
Huang declined to give specifications of the new missile, aimed at replacing the ageing US-made Hawk missiles - but media speculated that Tienkung III has a range of up to 200 kilometres (124 miles).
The project is part of the island's efforts to build an air defence shield against any Chinese attacks.
Taiwan split from China in 1949 after a civil war, but China sees it as part of its territory awaiting reunification - by force if necessary.
Ties between China and Taiwan have improved markedly since Beijing-friendly President Ma Ying-jeou took office in 2008 and strengthened trade and other links, but fears of a Chinese invasion remain.
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