The move comes as the airspace along the coast of North and South Carolina had been closed amid the national security operation.
US officials, speaking on condition of anonymity, told the Associated Press that President Joe Biden had given the green light for the operation to go ahead.
The Federal Aviation Administration (FAA) issued a ground stop affecting three airports in North and South Carolina as the balloon drifted through its airspace, a spokesperson said.
“The FAA has paused departures to Wilmington (ILM), Myrtle Beach International (MYR) and Charleston International (CHS) airports to support the Department of Defense in a national security effort,” the statement said ahead of the balloon being taken down.
The balloon is suspected of having conducted spying activities on the US military.
Four US officials said earlier that the plan was to bring it down over the ocean and to recover remnants of the balloon, the Associated Press reported.
Planes were seen circling the balloon off the coast of Myrtle Beach, South Carolina, on Saturday afternoon before it was brought down.
President Joe Biden said on Saturday afternoon that he “ordered the Pentagon to shoot it down on Wednesday as soon as possible”.
He added that military leaders chose to wait until the balloon was above water as it was “the safest place to do it”.
“They successfully took it down and I want to complement our aviators who did it,” he said after getting off Air Force One on his way to Camp David, according to the Associated Press.
In a statement on Saturday, Defence Secretary Lloyd Austin said Mr Biden authorized the takedown of the balloon on Wednesday as soon as possible “without undue risk to American lives,” CNN reported.
The military said “downing the balloon while over land posed an undue risk to people across a wide area”.
Secretary Austin said because of the size and altitude of the balloon, taking it down over land would put Americans at risk.
Senate Majority Leader Chuck Schumer tweeted after the shooting down of the balloon: “I strongly condemn President Xi’s brazen incursion into American airspace, and I commend President Biden’s leadership in taking down the Chinese balloon over water to ensure safety for all Americans. Now we can collect the equipment and analyze the technology used by the CCP.”
Mr Biden said earlier on Saturday that the US would “take care of” the Chinese spy balloon in response to a question from a reporter while getting into his car at an airfield in Syracuse, New York. The president had been visiting members of his family.
He was also asked by CNN if the US would shoot down the balloon, saying at the time: “We’re gonna take care of it.”
Mr Biden had been looking at options with military leaders since his initial briefing on the balloon on Tuesday. He ordered the balloon to be shot down the following day.
Advisers warned against shooting it down over land as debris may injure people or damage homes. Military leaders said the risk to people on the ground weighed heavier than any possible intelligence gained by China.
The balloon had hovered over sensitive military sites in the US, including where some of its nuclear arsenals are being held.
An effort to recover as much as possible of the balloon was ongoing on Saturday afternoon. The balloon had been flying at a height of 60,000 feet (18,288 metres). It’s estimated to have been about the size of three school buses.
Many users of Chinese social media appeared to agree with the Chinese government’s stance that the US was overhyping the situation ahead of the balloon being taken down.
Many account holders joked about the spy balloon, and others suggested that since the US has placed restrictions on the kinds of technology China can purchase, they were unable to control the balloon, the Associated Press reported.
Some users referred to it as the “wandering balloon” in reference to the recently released Chinese sci-fi movieThe Wandering Earth 2.
Some mocked the US for being unable to stop a balloon from entering its airspace. A number of nationalist influences used the story to make fun of the US.
“The U.S., because of the balloon incident, delays [Secretary of State Antony] Blinken’s visit to China,” one wrote.
Censorship was quickly put in place, with the “wandering balloon” hashtag on the social media platform Weibo not being searchable by Saturday night in China.
Chinese military expert Chen Haoyang appeared on one of the largest TV channels in the country, Phoenix TV, to push back against the US reaction to the discovery of the Chinese spy balloon in US airspace.
“The U.S. is hyping this as a national security threat posed by China to the U.S. This type of military threat, in actuality, we haven’t done this. And compared with the U.S. military threat normally aimed at us, can you say it’s just little? Their surveillance planes, their submarines, their naval ships are all coming near our borders,” the expert said, according to the Associated Press.
The top Chinese diplomat, Wang Yi, said on Saturday ahead of the balloon being shot out of the sky that China “has always strictly followed international law”.
He added that “we do not accept any groundless speculation and hype. Faced with unexpected situations, both parties need to keep calm, communicate in a timely manner, avoid misjudgments and manage differences”.
He said the balloon’s path was out of China’s control and he urged the US not to “smear” the country based on the recent events.
China has said that it “regretted” that the balloon unintentionally entered US airspace.
An associate professor at the National University of Singapore, Alfred Wu, said the apology appeared insincere.
“In the meantime, the relationship will not improve in the near future ... the gap is huge,” he said, according to the Associated Press.
China is downplaying the cancelled visit of Mr Blinken amid the fallout of the discovery of a Chinese spy balloon over US airspace.
The Chinese Ministry of Foreign Affairs said in a statement on Saturday that “in actuality, the U.S. and China have never announced any visit, the U.S. making any such announcement is their own business, and we respect that”.
Mr Blinken was set to visit China on Sunday for discussions focused on reducing the tensions between the two countries. It would have been the first trip of a top diplomat following the meeting of Presidents Xi Jinping and Joe Biden in Indonesia in November.