That would amount to about 20 percent of the 7.7 billion shares of Citigroup common stock that the government owns.
It received the shares as compensation for the massive support it extended to the bank during the height of the financial crisis.
In a statement Monday, Treasury said Monday that it planned to proceed with the sales of the Citigroup common stock "in an orderly fashion under a pre-arranged trading plan with Morgan Stanley, Treasury's sales agent."
Treasury did not disclose in its brief announcement exactly when the initial stock sales would begin or how long the sales would last.
Treasury said Morgan Stanley had the authority to make the initial sales "under certain parameters" and that Treasury expected to give the company the authority to sell additional shares after the initial 1.5 billion shares had been sold.
The sales should earn a tidy profit for the government which purchased the common stock in the summer of 2009 at a share price of $3.25 a share. Citigroup closed Friday at $4.86 a share but was changing hands in pre-opening trading on Monday at $4.82 per share.
At the moment, the Treasury owns 27 percent of the company in return for an investment of $25 billion.
Treasury had announced last month that it would soon begin sales of its Citigroup stock and planned to sell the shares over the course of this year.
Citi, one of the hardest-hit banks during the financial crisis and Great Recession, received a total of $45 billion in bailout money. That was one of the largest rescues under the government's $700 billion bailout fund, known as the Troubles Assets Relief Program.
Of the $45 billion, $25 billion was converted to a government ownership stake in Citi last summer and the bank repaid the other $20 billion in December.