About 13 per cent of the former state-owned postal service has been sold to institutional investors through a share placing, priced at 455p a piece.
The remaining 1 per cent slice of ten million shares will be gifted to eligible Royal Mail workers, raising their stake in the company to 12 per cent.
The sale price is notably lower than 500p per share achieved in the most recent disposal over the summer, when a 15 per cent stake raised £750m for the government.
In total, it has raised £3.3 billion from the sale of Royal mail, with proceeds used to pay down the national debt.
Business Secretary Sajid Javid said: “This is a truly historic day for Royal Mail with the workers gaining a share of this history.
“We have delivered on our promise to sell the government’s entire remaining stake which means that for the very first time the company is now wholly owned by its employees and private investors.
“Proceeds will also go to help pay off the national debt – a crucial part of our long-term plan to provide economic security for working people.”
Chancellor George Osborne added: “This is a milestone moment in the long and proud history of the Royal Mail, when we secure its long-term future.
“By fully leaving state ownership we have a win all round – for customers, the workforce and the taxpayer. And every penny will be used to pay down our national debt as we continue to bring our public finances under control.
“Once again, we are also going to recognise the hard work of the staff who have done a great job in turning the company around, and give them a 1 per cent stake to share between them.”
When the Royal Mail was privatised, the government was heavily criticised for undervaluing the organisation.
A report last year suggested it had made £180m less from the sale of Royal Mail than it could have, as shares could have been valued up to 30p more than the flotation price of 330p given the high level of demand.
The Communication Workers Union has branded the sell-off as a “disgrace”.
General secretary Dave Ward said: “This fire sale nails the lie that the Tories stand up for the interests of ordinary people.
“The remaining government share in this profitable company should have been used to safeguard the public’s voice in Royal Mail and ensure the continuation of daily deliveries to every address in the country. The Tories have instead chosen an ideological course that puts the fundamental ethos of a centuries old national institution in jeopardy.”
A Royal Mail spokesman said: “We note the government’s announcement that it has disposed of its remaining shares in the company, and welcome its gifting of a further 1 per cent to Royal Mail employees. This will bring the total employee free shares holding in the company to 12 per cent.
“Royal Mail remains committed to the universal service obligation and to delivering for all 29 million homes and businesses in the UK.”