Taiwan will give Palau a patrol boat as part of agreements signed this week during a visit by President Tsai Ing-Wen.
Ms Tsai is due to visit Palau as part of a multi-country visit to three of Taiwan's Pacific allies starting on Thursday.
The Island Times reported the two countries will sign a maritime cooperation agreement which includes the provision of a small patrol boat and technical assistance.
It comes amid a looming January 2020 deadline for Palau to prohibit all commercial fishing in 80 percent of its waters.
Last week, the Taiwan Embassy in Koror said Taiwan fishing operators wanted to continue fishing in Palau waters.
It said fishing boats owned by the operators brought in more than $US6.9 million in Palau, which would be affected by the commercial fishing restrictions.
The embassy said it hoped to "bridge a solution that can be accepted by both the (Palau) Government and Taiwan fishing operators."