Britain has raised £3.2 billion sterling from the sale of a 6% stake in Lloyds Banking Group, marking a milestone in the economy's recovery from the 2008 financial crisis.

Britain pumped a combined £66 billion into Lloyds and Royal Bank of Scotland in 2008, leaving it with a 39% shareholding in Lloyds and an 81% stake in RBS.

The coalition government sees the sale as an important step in its plan to recover taxpayers money and repair the UK economy.

"This is another step in the long journey in putting right what went so badly wrong in the British economy," Finance Minister George Osborne said today. 

"It's another step in repairing the banks, it's another step in getting the money back for the taxpayer, and it's another step in reducing our national debt,'' he added.

The stock was sold to unnamed investment institutions at 75 pence per share, a 3% discount to Lloyds' closing price yesterday and ahead of the government's average buy-in price of 73.6 pence, meaning the government will make a profit of £61m.

The sale will reduce the government's debt by £586m pounds, as the shares were on its books at 61.2 pence, taking into account fees already repaid by Lloyds.

UK Financial Investments (UKFI), the body which is in charge of managing the state's holdings in the two banks, sold the shares to financial institutions after yesterday's London market close through a fast track process known as an accelerated bookbuild.

The sale was 2.8 times covered by demand from investors, a source with direct knowledge of the transaction told Reuters.

The government's stake in Lloyds will be reduced to 32.7% from 38.7%. It has agreed not to sell any more shares in the bank for 90 days.

The sale is a also vindication for Lloyds' chief executive Antonio Horta-Osorio, who has restored the bank to profitability since his appointment in 2011, simplifying the business to focus on lending to UK households and businesses.

"I believe this reflects the hard work undertaken over the last two years to make Lloyds a safe and profitable bank that is focused on supporting the UK economy," Horta-Osorio said.

The turnaround had prompted hopes the bank will start paying dividends again next year, having seen its shares double in value over the past year.