The misfiring of the supersonic "aircraft carrier killer" last month struck a damaging blow to the military's image, embarrassing new president Tsai Ing-wen and angering Beijing.
The Hsiung-feng III (Brave wind) missile hit a Taiwanese trawler, killing the skipper on board and injuring three other crew members.
The misfire -- the biggest military slip-up since Beijing-sceptic Tsai came to power in May -- sparked an uproar in Taiwan and drew a stern rebuke from China.
Prosecutors in the southern port city of Kaoshiung revealed on Monday that naval officer Kao Chia-chun had been left alone in the master control room for as long as seven minutes.
Kao decided to practise without a supervisor, despite the system being in "combat mode", prosecutors said in a statement marking the end of their investigation.
"(He) did not ultimately notice that missiles no.3 and no.4 were already in 'live-fire' mode and went on to press...'allow launch', 'launch missile', and 'confirm'", prosecutors stated.
One of the missiles travelled for about two minutes, automatically searching for a target before locking onto the fishing boat in the waters off Taiwan-administered Penghu island.
Kao was charged with negligence leading to death and injuries, as well as damaging weaponry.
Chen should have been supervising but left Kao alone during the incident on July 1, the statement said.
President Tsai last week called for the defence ministry to hammer out a new strategy and improve its performance, while attending an annual military exercise simulating China attacks.
The mainland is the biggest military threat to self-ruling Taiwan, which Beijing sees as a breakaway province to be reunified.
Tensions have risen across the strait under Tsai as Beijing does not trust her traditionally pro-independence party.
According to Taiwan's defence ministry, there are 1,500 Chinese missiles aimed at the island.
China launched some of the missiles into waters off Taiwan in 1995 and 1996 in an attempt to deter voters in the island's first democratic presidential elections.
Last month's misfire coincided with China celebrating the 95th anniversary of the Communist Party.
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