Royal Bank of Scotland is to pay the UK government £1.5bn ($2.5bn) to cancel an arrangement that sees it give the state priority over dividends.
The move, ratified by the EU on 9 April, brings the lender closer to privatisation, as the arrangement made RBS stock less attractive to private investors.
Go deeper with GlobalData
"This is another important step on the road to a more resilient banking system and in dealing with the problems of the past to get taxpayers’ money back," said UK finance minister George Osborne.
Following the financial crass, the UK government bailed out RBS to the tune of £45.8bn, giving the taxpayer an 81% shareholding in the bank.
The cancellation of the dividend access share deal will enable RBS to resume dividends to existing investors but the lender said it had no immediate plans to.
CEO Ross McEwan said: "Today’s agreement is a vote of confidence in the progress we have made in rebuilding RBS and in our plan for the bank’s future.
"We now need to get on with building an RBS that can earn the trust of our customers and help change UK banking for the better."
Shares in RBS closed at £3.10 on 9 April, meaning that if the government sold its stake now, the loss to the taxpayer would be £18bn.
Lloyds Banking Group was also bailed out during the crisis but has made a much stronger recovery and is currently expected to be privatised by May 2015.
Related articles:
Deutsche Pfandbriefbank to stick to 2015 privatisation timetable
Spanish government to sell 7.5% in state-backed Bankia
UK government realized value for money by divesting Lloyds’ shares: NAO
