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According to its initial analysis, the air force said the object in "northern airspace" on Friday afternoon was for meteorological and scientific research purposes.
"As it could affect aviation safety, we have notified the aviation control units to remind air planes to beware," the air force statement said.
"We will continue to monitor until the target disappears."
The statement did not say where the balloon came from or provide a more detailed location.
The sighting comes after an order by President Joe Biden to shoot down what the United States has since called a "sophisticated high-altitude spying vehicle" that sparked the latest row between Washington and Beijing.
US officials said it was part of a fleet allegedly floating around the globe, while China has said the balloon was an errant weather observation aircraft with no military purpose. Both sides have since accused each other of espionage.
Taiwan, a self-governed democracy claimed by China, said last week that it had found the remains of a suspected Chinese meteorological balloon and would increase patrols at military facilities.
Taiwan's defence ministry revealed on February 14 that Chinese balloons have previously flown over the island, without providing details on the number or frequency.
At that time, the ministry said it would shoot down any targets that pose a "high level of threat", but added that it had not encountered any such threats.
Beijing has ramped up military, diplomatic and economic pressure in recent years on Taiwan, which China has vowed to seize one day, by force if necessary.
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