The Treasury could unveil a preset trading plan next month for the sale of its 27 percent stake in Citigroup Inc , Bloomberg said on Thursday, citing people with direct knowledge of the matter.

Citigroup shares rose 2.9 percent to close at $4.27 following the report, which soothed investor fears that the United States would dump large blocks of shares on the market.

The Treasury plan will lock the government into a schedule for selling its shares with the aim of eliminating any concerns that the sales are based on nonpublic information, Bloomberg said.

The Treasury would issue instructions on how many shares to sell and at what price, it said.

Citigroup has posted more than $100 billion of writedowns and credit losses since late 2007 and the bank's shares have lost 90 percent of their value since late 2006, with the bank requiring three different government rescues in 2008 and 2009.

Representatives of Citigroup and the U.S. Treasury declined to comment.

(Reporting by Sakthi Prasad in Bangalore, additional reporting by Dan Wilchins in New York; Editing by Greg Mahlich and Tim Dobbyn)

Citigroup Sale