Medibank Private will be offered for sale next financial year, likely netting the federal government about $4 billion.

But the exact timing and structure of an initial public offering are yet to be determined.

Finance Minister Mathias Cormann, in announcing the decision on Wednesday, said an independent scoping study concluded there was no compelling reason for the government to own Medibank Private.

Nor was there any evidence that premiums would increase as a result of the sale of Australia's largest private health fund.

Senator Cormann refused to speculate about a possible sale price although analysts have suggested a figure close to $4 billion is possible.