The government received about 7.7 billion shares, or a 27 per cent ownership stake, as compensation for the massive support it extended to the bank during the height of the financial crisis in 2008.
The sales should earn a profit for the government, which purchased the common stock in 2009 at a share price of $3.25.
If the government sold all its 7.7 billion shares at $4.70, it would receive about $36.2bn in proceeds - $11.2bn above the $25bn it originally paid for the shares.
The announcement comes as Washington tries to draw back the $700bn of taxpayers' money used to prevent the collapse of the global financial system in 2008.
At the height of the crisis, the government injected a total of $45bn into Citigroup.
The New York-based company faced massive losses in the wake of the mortgage crisis and despite repaying some $20bn to the authorities in December, Citigroup is still one of the last of the major banks operating in the shadow of a US government bailout.
Last week the bank announced that it had returned to profit after two years spent largely in the red, posting a profit of $4.4bn in the first quarter of this year.