The disclosure, made in a filing to the US Securities and Exchange Commission, will see the former chief executive’s control over the company loosened as he sells 3.2m shares. The stock closed at a record high of $785.37 on Friday.
Although Schmidt only held two per cent of Google’s shares at the end of 2012, he had eight per cent of the voting rights thanks to a special class of stock issued to early backers. This sale will leave him with around five per cent of the voting rights but the company insists he remains committed to the business.
“This is a routine diversification of assets,” the company said in a statement. “This is a routine diversification of assets and Eric remains completely committed to Google.”
The sale of his shares will be staggered over a 12-month period as part of an arms-length trading plan designed to reduce the market impact. Last year he sold 2.4m shares in a similar scheme.
Schmidt joined the search engine business in 2001 and helped turn into one of the world’s largest companies before handing control back to Google co-founder Larry Page in April 2011.
Since then he has taken a leading role in negotiations with the US government, in addition to writing a book on the future of the internet. Last month he made a high-profile visit to North Korea with former New Mexico Governor Bill Richardson.
Schmidt was ranked 138 on the Forbes list of global billionaires with a net worth of $6.9bn in March 2012.