The president’s offer includes giving 700,000 recipients of the Deferred Action for Childhood Arrivals (DACA) program an extended protection from deportation and access to work permits and social security numbers.
He has also offered a longer Temporary Protected Status for 300,000 migrants to enable Congress to work on a “larger deal”.
House Speaker Nancy Pelosi indicated the offer was dead on arrival.
“Democrats were hopeful that the President was finally willing to re-open government and proceed with a much-need discussion to protect the border,” she said in a statement released ahead of Mr Trump’s address.
“Unfortunately, initial reports make clear that his proposal is a compilation of several previously rejected initiatives, each of which is unacceptable and in total, do not represent a good faith effort to restore certainty to people’s lives.
“It is unlikely that any one of these provisions alone would pass the House, and taken together, they are a non-starter.”
Democrats are angry Mr Trump’s offer to extend protections for DACA program recipients is only temporary.
Mr Pelosi slammed the deal for not including “the permanent solution for the Dreamers and TPS recipients that our country needs and supports”.
Among others measures, Mr Trump called for $US800 million in “urgent humanitarian assistance”, $US805 million for drug detection technology to “help secure ports of entry” and another 2750 border agents, alongside 75 new immigration judge teams.
The president described his wall funding as the “strategic deployment of a physical barrier”.
“This is not a 2000-mile structure from sea-to-sea. These are steel barriers in high priority locations.”
“The crime rate and drug rate in our country would be quickly and greatly reduced,” if the wall was built, he said. “Some say it could be cut in half”
Ann Coulter, a rightwing columnist, took to Twitter to slam Mr Trump’s plan for going soft on immigrants who broke US laws.
“Trump proposes amnesty. We voted for Trump and got Jeb!,” she wrote.
Marco Rubio, Republican Senator from Florida and critic of Mr Trump, said it was unreasonable for Democrats to demand the president’s “unconditional surrender” on the wall.
“I hope Democrats won’t just automatically reject his offer.”