The 7.4 magnitude quake caused multiple buildings to collapse in Hualien, the city closest to the epicentre.
The strongest tremor to hit the island in 25 years was also felt as far as Taiwan's mountainous interior, which was rocked by huge landslides.
In the capital Taipei, footage showed buildings shaking violently.
"The earthquake is close to land and it's shallow. It's felt all over Taiwan and offshore islands... It's the strongest in 25 years," said Wu Chien Fu, the director of Taipei's Seismology Centre.
The National Fire Agency said three have died at a trail around Taroko National Park, named after a landmark gorge just outside Hualien.
More than 50 people have been injured, with some trapped in buildings and tunnels around the city, the agency added.
Source: www.bbc.com
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