The US Treasury will sell down 9% of its AIG stake and aims to recover all its investment in the company, acquired in 2008 as part of a bailout of the insurer in the global financial crisis.

The Treasury hopes to raise $US5.8 billion ($5.75 billion) from the sale and AIG plans to take $US2 billion ($1.99 billion) of the stake.

The selldown will reduce the US Government holding in AIG from 70% to 61%.

Assistant Secretary for Financial Stability Tim Massad says Treasury is making significant progress quitting its investment in AIG.

“We remain hopeful that taxpayers will ultimately recover every single dollar invested in the company, which is something few would have expected during the depths of the financial crisis,” he said.

AIG CEO Robert Benmosche says the sale is a further step towards taxpayers making a profit from their investment in AIG.