Chancellor of the Exchequer, George Osborne said:
"It’s fantastic news that we’ve sold more shares in Lloyds Bank, taking the total recovered to over £12.5 billion.
"I am determined to build on this success, and to continue to return Lloyds to the private sector and reduce our national debt."
The trading plan was launched on 17 December 2014 and will end no later than 31 December 2015.
In his annual Mansion House speech last month, George Osborne announced that the government would also begin to sell off its stake in the Royal Bank of Scotland.
Osborne said he had received independent advice from the Governor of the Bank of England that it is now "in the interest of taxpayers" to start the sale, but he has been criticised for selling the bank at an estimated £7 billion loss.