NU Online News Service, March 8, 9:25 a.m.EST

WASHINGTON (AP) — The Treasury Department saidWednesday it is selling $6 billion worth of the $41.8 billion incommon stock it holds in insurance giant American InternationalGroup Inc., which received the biggest bailout of the financialcrisis in 2008.

The stock sale is a step by the government toward disentanglingitself from AIG. It still owns 77 percent of the company's commonshares. Treasury said AIG plans to buy as much as $3 billion of thestock being sold.

Treasury also said it has a deal with AIG for it to repay thegovernment's remaining $8.5 billion preferred-stock investment inthe company.

A price for the common shares wasn't specified. The share priceat which taxpayers would break even on their AIG investment isabout $28 or $29. AIG shares closed at $29.45 in trading Wednesday.They fell 53 cents, or almost 2 percent, to $28.92 on heavy volumein afterhours trading following the announcement of the stocksale.

The government stepped in with $182 billion to rescue NewYork-based AIG from collapse in the depths of the financial crisis.Treasury has recouped $18 billion of the $68 billion it providedthe company through its Troubled Asset Relief Program, or TARP. Theremainder of the money came from the Federal Reserve Bank of NewYork. AIG has repaid all but $17.5 billion of those loans.

Treasury made an initial sale of AIG stock in May 2011. Thesales were expected to resume after the value of AIG sharesincreased. Last year, the stock lost nearly half its value, partlyfueled by government sales of the company's stock and a volatilestock market.

Under the agreement for repaying the $8.5 billionpreferred-stock investment plus interest, $5.6 billion will comefrom AIG's newly announced sale of part of its stake in HongKong-based insurer AIA Group Ltd., $1.6 billion from a sale ofsecurities by the New York Fed, and another $1.6 billion from AIG'ssale of its American Life Insurance Co. subsidiary.

"The people of AIG have achieved another significant milestonein our progress toward our goal that American taxpayers recouptheir entire investment in AIG at a profit," AIG President and CEORobert Benmosche said in a statement.

AIG had a $19.8 billion profit in the fourth quarter of lastyear, nearly all of it due to a tax-related accounting gain. Thecompany also earned $17.8 billion for 2011, its second straightyear of profits.

Despite the two years of profitability, AIG's recent financialresults have been inconsistent. Over the past two years, only halfof its quarterly reporting periods have been profitable.

Treasury said it has hired Citigroup Global Markets Inc., CreditSuisse Securities (USA) LLC and Morgan Stanley & Co. LLC asjoint coordinators for the common stock sale.