From left: chairman of the American Institute in Taiwan James Moriarty, US assistant secretary of state for education and culture affairs Marie Royce, Taiwan's president Tsai Ing-wen, principal deputy director ambassador William Moser and AIT director Kin Moy.
"We have faced many trials along this journey, but we have risen to the challenge at every turn, knowing that our shared commitment to democracy would see us through", Royce said, according to Reuters.
China bars Taiwan from membership in the United Nations and many other global organizations and has been luring away the island's remaining diplomatic allies, leaving it with just 18.
In order to establish diplomatic relations with China, Washington was required to acknowledge Beijing's One China policy, which does not recognize Taiwan as an independent state. In the 1970s, the U.S. State Department acknowledged this view and agreed not to meddle in the dispute.
Chinese President Xi Jinping has frozen ties with Taipei since Tsai came to power in 2016 and refused to accept - as her predecessor had - that Taiwan is part of China under a framework for dialogue between the two sides.
China's Foreign Ministry spokesman Geng Shuang on Tuesday said it had lodged stern representations with the U.S. about the new AIT building.
Also attending the ceremony was Taiwan's President Tsai Ing-wen, whose independence-leaning administration Beijing has sought to isolate diplomatically and threatens with invasion.
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Italy responded to French criticism by summoning its ambassador. Refugees have continued to arrive as politicians trade blame. Italy and Malta did not allow the Aquarius vessel to dock.
Tsai's ruling Democratic Progressive Party says it wants stable relations with China, but hasn't followed Tsai's predecessor, Ma Ying-jeou, in endorsing the "one China" principle.
It remains unclear whether AIT's new compound will be guarded by active service U.S. Marine Corps soldiers, which are a standard feature among all other U.S. embassies around the world. It manages its relations through the American Institute in Taiwan (AIT).
"AIT's new home is a tangible symbol that reflects the strength of our ties", said Royce.
The AIT building, spread over 6.5 hectares (16 acres) of land, costs around $250 million and will employ more than 500 people and would be protected by US Marines.
The ceremony will take place Tuesday, the same day US President Donald Trump is scheduled to meet with North Korean leader Kim Jong-Un in Singapore.
China has also stepped up military exercises and air patrols close to Taiwan.
Despite condemnations from China, the USA continues to sell advanced weapons to the island under the Taiwan Relations Act for its self-defense against a much bigger Chinese military. In February, Trump signed into law the Taiwan Travel Act, which allows top US officials to visit the island.