The State is to get back €1.64bn from AIB.
It follows the completion of AIB's Capital Reorganisation
The Government has said the transaction marks the first meaningful return of capital to the State from its investments in AIB during the banking crisis.
Meanwhile AIB has secured a further 200 million for lending to businesses.
The funding from the Strategic Banking Corporation of Ireland is lent by AIB at rates up to 2% below their normal rate.
5000 businesses have already been lent €200m since last March.
CEO of AIB Bernard Byrne has said this lending will create jobs in the economy: "Loans between €1,000 and a million euros, we are delighted to have played our part in that,
"Delighted that we are now sitting with the full €200m allocation that we need to move on and get out into the market place, to get into companies and to get jobs moving.”