The early morning flight from Taipei to Magong in the Penghu islands was carrying 22 passengers and four crew when the pilot of the ATR 72-500 plane spotted an oil leak, the carrier said.
"The pilot found one engine was leaking lubricant oil and had to shut it down in accordance with the standard operation procedures," the statement said, adding that the airline immediately informed the Civil Aeronautics Administration.
In February, an ATR 72-600 with 53 passengers and five crew on board clipped a bridge and plunged into a river shortly after taking off from Taipei airport, leaving only 15 survivors.
This followed another accident in July last year, when an ATR 72-500 propeller plane -- the same model as the flight involved in Tuesday's incident -- carrying 54 passengers and four crew crashed into houses in Magong on a domestic flight. Ten people survived, some of them badly injured.
The draft of that report is due out in November with the final version expected in April 2016.
TransAsia said they had stepped up pilot training and brought in new safety experts amid public outrage over the two incidents.
Taiwan's aviation regulator had also ordered TransAsia pilots to take an oral test on basic operating and emergency procedures for the French-made aircraft after the initial findings of the February crash pointed to pilot error.
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