The Government is to float a quarter of its shares in Allied Irish Bank.
Analysts say it could raise around 3 billion euros, based on the bank's book value of 11.3 billion euros at the end of previous year and the fact that it has continued to generate capital and resumed dividend payments since.
Dublin rescued the bank in a 21 billion-euro ($23.50 billion) taxpayer bailout that began in early 2009, and it has been considering partly cashing out of its 99.9 percent stake since past year.
The State now owns around 99.9% of AIB's ordinary shares.
Ireland's drive to recoup money from the bank rescue that nearly bankrupted the nation is finally gaining pace. It is expected to be one of the largest UK Main Market IPOs of the last 20 years.
The "decision is a significant step in the continued normalisation of the state's involvement in Ireland's banking system", he added.
In comments aired on Wednesday, Finance Minister Michael Noonan suggested the state may even eventually make a profit on its investment in the bank, even though it may take a decade to fully privatize the lender.
Shares of AIB are to be sold off as part of the Irish State's plans to return the bank to private ownership.
DUBLIN, May 31 (Reuters) - Allied Irish Banks is attracting very significant investor interest as Ireland begins returning the bank it rescued nearly a decade ago to private ownership, its chief executive said on Wednesday.
The sale will also represent the government's biggest test of investor appetite for its banks.
Last year AIB was valued at 11.3bn euros, so a share sale may yield 3bn euros or more.
The government will use the funds from the flotation to reduce the national debt by about 1.5%.
The IPO will be available to institutional and retail investors, with a minimum application of €10,000 per investor, and proceeds will be received by the Irish government.