Published: Sep 30, 2010 3:30 PM EDT
Updated: Sep 30, 2010 12:30 PM EDT

NEW YORK (AP) - AIG said Thursday it reached a deal to repay the government billions of dollars in assistance it received during the credit crisis.

The U.S. Treasury Department will swap debt it currently holds in AIG for common stock and then sell those shares over time. AIG will also repay loans it received from the Federal Reserve Bank of New York as part of the deal.

New York-based American International Group Inc. was one of the hardest hit financial companies by the credit crisis. It received a bailout package worth as much as $180 billion from the government, which received an 80 percent stake in the company in return.

As of June 30, AIG still had $132.1 billion in outstanding aid from the government, including $49.1 billion in loans from the Treasury Department. That $49.1 billion will be converted into common stock, which the Treasury will then sell over time.

The new shares will give the Treasury a 92.1 percent stake in AIG before it begins selling shares.

AIG owes the Federal Reserve Bank of New York about $20 billion. It plans to repay that debt through cash it has on hand and through the sale of some its subsidiaries. AIG has been selling some of its units since it received the initial bailout in September 2008.

AIG said in a separate statement Thursday that it has reached a deal to sell two Japanese life insurance units to Prudential Financial Inc. for about $4.2 billion in cash.

Shares of AIG rose 16 cents to $37.61 in pre-market trading.