Krathon, packing sustained winds of 198 kilometres per hour (123 miles per hour) -- equivalent to a Category 3 hurricane -- and gusts of up to 245 kph was expected to make landfall Tuesday near the major port city of Kaohsiung.
Offices and schools were closed across southern and eastern Taiwan and the interior ministry said more than 7,700 people had been evacuated from vulnerable areas as a precaution.
President Lai Ching-te warned Krathon could "inevitably cause catastrophic damage".
"The path of Krathon is relatively rare, entering from the south and exiting from the east. Therefore we must be particularly vigilant," he said at a government briefing.
Nearly 40,000 troops were on standby for relief missions, the defence ministry said.
Dozens of international and domestic flights have been cancelled.
In southern Kaohsiung where the typhoon was forecast to make landfall, residents filled sand bags and erected barriers around their homes for flood protection and taped windows.
Coast guard officers patrolling the nearby popular tourist beauty spot of Sizihwan Bay told people to stay away as powerful waves pounded the coast.
Retiree Ou Rui-yao, who was birdwatching in the area, said he had made preparations at home such as putting up flood barriers.
"We need to be very careful as this typhoon must be very strong," said Ou, 82. "Since the tide is high, we have put up water barriers," he said.
"For the whole of Taiwan, we can't underestimate this typhoon."
Storm pounds remote islands
The typhoon was around 230 kilometres south-southwest of Kaohsiung at 11:00 am (0300 GMT), the Central Weather Administration said.
The storm was approaching Taiwan after pounding a remote group of Philippine islands, where it cut power and communications and damaged "many" houses, according to the local mayor.
The Philippines' National Disaster Risk Reduction and Management Council said Tuesday nearly 1,800 people had been evacuated, around half in the Batanes islands near southern Taiwan.
Taiwan's coast guard said a Barbadian ship, "Blue Lagoon," at sea off the southeast city of Taitung was taking on water and tilting over due to the storm, with its 19 crew waiting to be airlifted to safety when conditions permitted.
Across Taiwan, 15 typhoon-related minor injuries were reported as of Tuesday, authorities said without providing details.
In Taitung, where the typhoon has brought heavy rains and waves of up to seven metres (23 feet), a man was sent to hospital after his truck was hit by a huge falling rock as he was driving along a mountainous route, local media said.
Typhoons are common around the region at this time of year.
However, a recent study showed that they are increasingly forming closer to coastlines, intensifying more rapidly and lasting longer over land due to climate change.
