DETROIT, MI- General Motors Co. will purchase 200 million shares of GM common stock held by the U.S. Department of the Treasury for $5.5 billion.

The Detroit-based automaker made the announcement Wednesday as part of the U.S. Treasury's plan to fully exit GM within 12 to 15 months, subject to market conditions.

"This announcement is an important step in bringing closure to the successful auto industry rescue, it further removes the perception of government ownership of GM among customers, and it demonstrates confidence in GM's progress and our future," said GM chairman and CEO Dan Akerson in a statement.

After the repurchase, the U.S. Treasury will continue to own approximately 300 million shares of GM stock, or approximately 19 percent of the automaker.

The U.S. Treasury intends to begin its final selling of its remaining shares as soon as January 2013, according to officials. The U.S. Treasury said the "manner, amount, and timing of the sales under the plan are dependent upon a number of factors."

“The auto industry rescue helped save more than a million jobs during a severe economic crisis, but TARP (Troubled Asset Relief Program) was always meant to be a temporary, emergency program," said Assistant Secretary for Financial Stability Timothy G. Massad in a statement. "The government should not be in the business of owning stakes in private companies for an indefinite period of time.”

The repurchase price of $27.50 per share represents a 7.9 percent, or about $2, premium over the stock's Tuesday closing price. The share buyback is expected to close by the end of the year, according to officials.

GM will record a $400 million charge on its balance sheet in the fourth quarter.

The Obama administration is poised to lose a substantial amount of money with the announced exit strategy. In August, it was reported to recoup all of its nearly $50 billion from GM, the U.S. Treasury

GM, or "Government Motors" as some critics have called it, has continually been ridiculed due to the government ownership, which was the result of the auto industry bailout that began under President George W. Bush in 2008 and which was expanded by President Barack Obama in 2009.

The U.S. Treasury initially owned nearly 61 percent of GM as part of the auto bailout, which forced the automaker and crosstown rival Chrysler through a government-backed bankruptcy.

The Obama administration completely exited Chrysler last year after recovering $11.2 billion of its $12.5 billion bailout to the Auburn Hills-based automaker.

Since offering a record IPO in November 2010, GM's stock price has fallen from about $33-a-share to under $19 earlier this year.

In pre-market trading Wednesday, GM stock [NYSE: GM] is trading more than $2 more than its $25.49 closing price.

Check back to MLive.com/auto for more information.