The pact was inked by Transportation Minister Lin Chia-lung and visiting Nauru President Lionel Aingimea at a ceremony witnessed by President Tsai Ing-wen at the Presidential Office in Taipei.
Under the agreement, all commercial flight operators from Taiwan and Nauru will be allowed to operate inbound and outbound flight services between the two countries.
According to Tsai, Nauru Airlines in November sent its representatives to Taiwan to discuss airline cooperation, such as extending flight routes to Taipei.
She told Aingimea that she looked forward to seeing the opening of direct flights between Taiwan and Nauru in the near future, thereby furthering people-to-people exchanges between the two countries.
At present, only Nauru Airlines serves Nauru, connecting it to Brisbane, Australia; Tarawa, Kiribati; Majuro, Marshall Islands; and Nadi, Fiji.
During her speech, Tsai also thanked the Nauru president for voicing his support for Taiwan at the just-concluded 25th Session of the Conference of the Parties (COP25), organized by the United Nations Framework Convention on Climate Change (UNFCCC), in Spain this year.
Aingimea said his country looked forward to building a brighter future with Taiwan through its continued assistance in Nauru's development through infrastructure and port cooperation and the provision of scholarships.
"Taiwan has strongly supported Nauru's infrastructure and economic development. When Nauru experienced a financial crisis in the 1990s, it was Taiwan that helped revive the operation of Nauru Airlines," he said.
After the signing ceremony, Aingimea was also treated to stinky tofu.
"We are making history today, because this is the first time in this building's century-long history that stinky tofu has been served at a state banquet," Tsai told the visiting delegation.
According to Tsai, the dish was served because the Nauru president had previously mentioned to her that he would like to try out stinky tofu the next time he is in Taiwan.
Aingimea's visit is his first official state visit to Taiwan since taking office in August, according to the Ministry of Foreign Affairs.
The Nauru president had previously made a transit stop in Taiwan on Sept. 28 after speaking up for the country at the 74th General Assembly of the United Nations, the ministry said.