The U.S. Treasury Department said it agreed to sell $5 billion of shares in American International Group Inc. with the bailed-out insurer buying $2 billion of the stock.

The Treasury is selling 163.9 million shares at $30.50 each, compared with Friday's closing price of $32.83, the department said in an e-mailed statement Sunday.

The transaction lowers the Treasury stake in AIG to 63 percent from 70 percent, according to the statement. The U.S. rescued AIG in 2008 as the New York-based firm was overwhelmed by losses on bets tied to mortgages.

“We’re continuing to make significant progress exiting our investment in AIG,” Assistant Secretary for Financial Stability Tim Massad, said in the statement.