WASHINGTON, Aug 23 (Reuters) - The U.S. State Department has approved a possible $500 million sale to Taiwan of infrared search and track systems for F-16 fighter jets, as well as other equipment, the Pentagon said on Wednesday.

"The proposed sale of this equipment and support will not alter the basic military balance in the region," it said in a statement. Beijing has repeatedly demanded the United States - Taiwan's most important arms supplier - halt the sale of weapons to the island.

The Pentagon said the principal contractor would be Lockheed Martin Corp (LMT.N), which makes the F-16.

Taiwan's defense ministry said the new equipment would be used for its latest F-16V aircraft, improving their ability to detect and track long-range targets and "greatly improve the effectiveness of air operations".

China's repeatedly sending military aircraft and drones into air space near Taiwan represents a serious threat to the island, and the ministry expresses its gratitude to the United States for the sale, it added in a statement.

Taiwan's military spending will rise by 3.5% year-on-year hand hit a record high in 2024, President Tsai Ing-wen said on Monday, pledging to improve defenses amid a growing threat from China, which views Taiwan as its own territory.

The $500 million is the maximum potential value of the contract and the actual dollar value will be lower, the Pentagon said. The United States unveiled a Taiwan weapons aid package worth up to $345 million late last month.

Despite approval by the State Department, the notification does not indicate that a contract has been signed or that negotiations have concluded.

However, Taiwan's defense ministry said it expected the sale to "take effect within a month".

Taiwan has been converting 141 F-16A/B jets into the F-16V type and has ordered 66 new F-16Vs, which have advanced avionics, weapons and radar systems to better face down the Chinese air force, including its J-20 stealth fighters.