Ta Tan and Er Tan -- two tiny fortified islands in the Kinmen group, just a few miles from the southern Chinese coastline -- were transferred by Taiwan's defence ministry to the local Kinmen county government.
"Ta Tan and Er Tan used to be crucial military defence posts," Taiwan's Premier Jiang Yi-huah said at a ceremony to formalise the transfer.
The Kinmen islands were heavily shelled by Chinese forces in the late 1950s. Ta Tan was the scene of a bloody battle between Chinese Communist troops and Kuomintang (Nationalist) forces during the civil war that ended with the split between Taiwan and the mainland 65 years ago.
But tensions across the Taiwan Strait have eased since China-friendly President Ma Ying-jeou came to power in 2008, pledging to boost trade links and allow in more mainland tourists.
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Chinese tourists now make hundreds of thousands of visits to Kinmen each year, but are still barred from the fortified offshore islets.
In February, China agreed to supply water to the island group.
Featuring fortresses, bunkers and huge anti-Chinese logos, Ta Tan and Er Tan are now scheduled to be opened to Taiwanese tourists, with restrictions, from July 2015.
Ta Tan and Er Tan are currently guarded by around 200 troops, a contingent that is set to be further reduced, government officials said.