GM will purchase 83.9 million shares of the preferred stock at $25.50 per share, or 102 percent of their estimated liquidation value.
The preferred stock, which functioned similarly to a loan, was paying a 9 percent dividend. GM issued stock to the Treasury in return for public aid through the Troubled Asset Relief Program.
Once the repurchase is complete, taxpayers will have received $9.5 billion of their $49.5 billion investment in GM through repurchases, interest and dividends.
Treasury will retain its 60.8 percent share of GM's common stock, which will represent its entire remaining investment in the company.
Taxpayers will start getting that money back this year when GM begins selling the stock. For taxpayers to turn a profit on the investment, GM shares will have to sell for at least $133.78 each -- higher than it has ever sold before -- the TARP Special Inspector General indicated earlier this fall.
The repurchase of Treasury's preferred stock was part of a larger $11 billion plan for GM to reduce its leverage. The company also announced Thursday that it is: