Typhoon Soudelor, packing maximum wind gusts of up to 209 kilometres per hour, was 790 kilometres southeast of Hualien county as of 5:30 pm local time (0930 GMT).
It is currently categorised as a moderate storm by Taiwan's Central Weather Bureau, although other observatories in the region class it as a severe typhoon.
Soudelor, predicted to strengthen as it approaches Taiwan, is expected to batter the island hardest between tomorrow and early Saturday.
Around 2,600 people, including tourists and residents, have been evacuated from Green Island and Orchid Island off the coast of the eastern county of Taitung, according to the tourism office.
Ferry services to the outlying islands were suspended today.
"It's (currently) posing a threat to the sea off the eastern half of Taiwan and the Bashi Channel," said the weather bureau.
"The chance of the typhoon strengthening later is still expected."
Taiwan celebrates Father's Day on August 8 and the inclement weather is expected to disrupt many families' plans.
"Although it won't have the same effect of Typhoon Morakot, this typhoon is still very well developed," Premier Mao Chi-kuo said today, referring to the storm that killed some 600 people in 2009, most buried in huge landslides.
"It must not be taken lightly," he added in a statement.
Around 32,000 soldiers were on standby for disaster relief, the ministry of national defence said today.
Weather across the Taiwan was still calm today afternoon with blue skies in the capital Taipei and temperatures above 30 degrees Celsius.
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