The sale programme started last December, and has raised £15bn so far, after the taxpayer provided a £20.5bn bailout package in 2008 in the midst of the financial crisis.
"It’s fantastic news that we’ve sold more shares in Lloyds Bank, taking the total recovered to £15bn," Osborne said. "I am determined to build on this success, and to continue to return Lloyds to the private sector and reduce our national debt."
In August, Osborne said the government's aim was to sell its stake in Lloyds within a year, which was reiterated by in a statement by the Treasury today, which said: "The trading plan was launched on 17 December 2014 and will end no later than 31 December 2015."
The government also offloaded a £2bn stake in Royal Bank of Scotland after seven years in August.