NEW YORK—American International Group Inc.'s plan to sell most of its stake in reinsurer Transatlantic Holdings Inc. through a public stock offering is expected to be a positive development for both companies and marks another step in AIG's divestiture plans, analysts say.

AIG, which owns 59% of New York-based Transatlantic Holdings, last week said it plans to sell about two-thirds of its stake in the unit through a secondary offering. A preliminary prospectus agreement filed by Transatlantic with the U.S. Securities and Exchange Commission calls for the sale of 26 million AIG-owned shares.

Underwriters will have a 30-day option to purchase an additional 15% of the offered amount, AIG said in a statement.

After the offering, AIG and its subsidiaries will own about 19.7% of the outstanding Transatlantic shares, or 13.9% if underwriters fully exercise their option.

“It's not a big surprise,” said Cliff Gallant, an analyst at Keefe, Bruyette & Woods Inc. in New York. “As a major shareholder, this is a relatively easy way for AIG to shore up its capital base.”

At current market prices, the sale of its share of Transatlantic could generate about $1 billion for AIG, analysts say.

“It's one of the areas where AIG is most likely to get fair market value,” Mr. Gallant said, referring to other potential AIG asset sales put on hold by the poor economy.

AIG is attempting to sell assets to repay a U.S. government loan package worth up to $182.5 billion. Currently, AIG has drawn down about $80 billion, said a spokesman for AIG.

AIG was forced to scale back plans to sell units amid the financial crisis. As a result AIG has been exploring public stock offerings instead of outright sales, analysts say.

“The goal would have been to sell (Transatlantic) through a private transaction,” said John Wicher of John Wicher & Associates in San Francisco. “It's a pretty dramatic statement when they are realizing higher valuations through a public offering, rather than a private transaction.”

For Transatlantic, AIG's plan is “very positive” Mr. Wicher said. “There has been a level of uncertainty around them due to the AIG association, and now that has been resolved,” he said.

Transatlantic “has always been a very strong company and they have made use of their relationship with AIG over time, but I think they will remain strong moving forward,” said Mr. Gallant.

Separately, AIG said last week that it completed the sale of its prime real estate holding in the Otemachi District in Tokyo to Nippon Life Insurance Co. for $1.2 billion in cash.