The Minister for Finance is to sell another 5% of the State's stake in AIB, bringing its remaining shareholding in the company from 45.8% to around 40.8%.
The stake will be sold through an institutional placing, with the price to be set by an accelerated "book building" process.
This is method of offering shares for sale to the market in a short time period of one to two days, with little or no marketing.
The placing is expected to comprise of around 131 million of the company's ordinary shares.
Minister Michael McGrath has also undertaken not to sell further shares in the company for the period of 90 calendar days following the completion of the placing.
Rothschild & Co is acting as independent financial adviser and William Fry and Allen & Overy are acting as legal counsel to the Department of Finance in connection with the sale.
Back in June, the State cut its stake in AIB to below 50% for the first time since effectively nationalising the bank more than a decade ago.
After the huge property crash in the late 2000s, Ireland pumped €64 billion into the country's banks.
Last year, the state sold its last shares in Bank of Ireland.
Profits at AIB, Bank of Ireland and PTSB have all shot up in the last year due to higher interest rates and the decisions by KBC and NatWest to shut their Irish businesses.
Last week, AIB lifted its full year income guidance for the third time this year after a higher interest rate environment contributed to a "very strong" third quarter that it expects to continue in the final three months.
In a trading update for the third quarter, the bank said its total income in the first nine months of the year increased by 70%, with net interest income (NII) up 95% year-on-year.
AIB's share price has almost doubled since the government announced the gradual selldown of its stake in late 2021.
Shares in the bank were lower in Dublin trade today, closing at €4.06 a share.
Additional reporting by Reuters
