The French government will raise about €1.3 billion from selling part of its holding in Renault in a move seen as boosting long-term sentiment in the firm's shares.
Bankers handling the sale said the French government would sell about 8.5 per cent of Europe's fourth-biggest automaker through the open market.
After the placement and a subsequent offering to employees, the French state will own about 15 per cent of Renault's capital.
The move was viewed positively by equity analysts as it will boost Renault's freefloat and thus make it more liquid.
The French government, which appeared to time the sale to take advantage of a recent rally in Renault's share price, said it would retain its current stake for now.
"We think the state's holding will contribute to the stability of the Renault shares," said a spokesman for the Economics and Finance Ministry.