In a statement UniCredit, which was sole bookrunner in the operation, said it had sold the stake through an accelerated book building process at 1.735 euros per Fondiaria share.
Fondiaria shares closed on Monday down 1.2 percent at 1.803 euros. UniCredit bought the stake for 170 million euros in 2011 when it took part at a capital increase at the insurer.
The sale comes at a time when European banks are moving to boost their capital base by selling unprofitable or non-strategic assets in the runup to a health check of euro zone lenders to be carried out by the European Central Bank over the next year. Fondiaria-SAI is slated to merge with peer Unipol in a deal expected to be completed by the end of this year.
Earlier on Monday shareholders at Milano Assicurazioni gave the final go ahead to the merger that will create Italy's No. 2 insurer. The Chief Executive of Unipol, Carlo Cimbri, has said he expects the merger deed to be signed by the end of the year and the new company, UnipolSai, to start trading at the beginning of 2014.
Unipol agreed in January 2012 to rescue Fondiaria SAI in a complex operation that will see Fondiaria, its parent company Premafin and subsidiary Milano Assicurazioni folded into Unipol.
UnipolSai - Italy's No. 1 non-life insurer and No. 5 life operator - had pro-forma premiums of 16 billion euros in 2012. It expects to generate synergies from the merger of 350 million euros by 2015.