The sale of $A 1.5bn ($US 1.53bn) worth of shares will reduce the government's holding in QRN from 33.9% (821.5 million shares) to 16% (389.2 million shares).
The deal involves a sale of $A 1bn of shares via a selective buyback to QRN and a $A 500m placement to a small number of investors.
QRN has acquired around 14.5m shares at a cost of $A 50m since August, when QR National unveiled an on-market buyback programme. The programme will be suspended pending investor approval of the selective buyback arrangement with the Queensland government.
The selective buyback is subject to approval by shareholders and also by an independent expert to establish that the transaction is fair and reasonable for all shareholders.
Queensland treasurer Mr Tim Nicholls said: "Whilst the Government will continue to review its investment in QRN, we have no current intention to sell any of our remaining shares in the near term."