The parties' decision will likely result in the reversal of President Ma Ying-jeou's contentious decision in late October to lift a previous ban to allow the imports of ground U.S. beef and offal and also U.S. bone-in beef.
Since Ma lifted the ban, protesters have staged rallies against the move, demanding to have a referendum on the issue out of the fear that the new U.S. beef imports could bring in mad cow disease.
On Tuesday, Ma's ruling Nationalist party reached an agreement with the main opposition Democratic Progressive Party to restore the previous ban on ground U.S. beef and offal.
The decision is expected to be voted into a law Jan. 5, Legislative Speaker Wang Jin-pyng said. He said that lawmakers will also vote on the same day on whether to restore the ban on bone-in beef, as only the DPP supports the motion. The DPP is a minority in the legislature.
To alleviate public fear, Ma has repeatedly reassured Taiwanese people that all U.S. beef is safe. Taiwan's National Security Council Chairman Su Chi, a key foreign policy adviser to Ma, has also warned Taiwan's relations with Washington could be hurt if lawmakers decide to reinstate the ban.
The presidential office said it will respect lawmakers' decision.
"The government will communicate (the decision) with the U.S. and hopefully minimize damage to avoid overwhelming impact on the Taiwan-U.S. relations," it said in a statement.
Thomas Hodges, a spokesman for the American Institute in Taiwan, said he was "disappointed" by the decision to restore the ban. The institute is the de facto U.S. embassy in Taiwan.
Some believe that the Ma administration removed the ban as a concession aimed at restarting talks on a free trade pact with the U.S. In 2007, talks on the deal were halted, primarily because of Taiwan's refusal to lift the bone-in-beef ban.
Mad cow disease is a brain-wasting disease in cattle, which in humans can cause a variant form, Creutzfeldt-Jakob Disease.
Taiwan purchased $128 million in beef products from the United States in 2008.