The sale of the block of 138.6m Series A shares is being made via an accelerated book building, Renault said.
Goldman Sachs is the sole bookrunner for the deal.
“After this transaction is completed, the Renault group will no longer hold any shares in AB Volvo,” Renault said in a statement yesterday.
It said it would use the proceeds from the share placement to reduce debt and invest in France, Russia and China.
The shares are being offered at between 91.25 and 93.25 Swedish crowns, according to a source familiar with the matter, indicating a transaction value of up to about $1.94bn (£1.2bn).
Renault sold a 14.9 per cent stake in Volvo in 2010 for €3bn (£2.4bn).
Renault acquired its stake in Volvo as part of the sale of its truck business to the Swedish company in 2001.