DUBLIN, June 28 (Reuters) - The Irish government has raised 305 million euros ($323 million) through the sale of a 5% stake in Allied Irish Banks (AIB) in an accelerated book build that cut its majority shareholding to 63.5%, the finance ministry said on Tuesday.

Dublin has been gradually selling shares in AIB since the start of the year through a share trading plan, and announced on Friday that it has raised 161 million euros by reducing its stake to 68.5% from 71.1% over the past six months.

The placing, which began after the market closed on Monday, was priced at 2.28 euros per share compared with an average price of 2.32 euros achieved during the more gradual sell down. AIB shares closed at 2.44 euros on Monday.

The state ended up with 99.9% of AIB after bailing out the entire Irish banking sector following a massive property crash more than a decade ago.

Before this year the government last sold shares in the bank in an initial 2017 IPO that raised 3.4 billion euros at 4.40 euros per share. It has used any bank sale proceeds to pay down a national debt that ballooned after the 2008 financial crisis.

"The transaction is an important development in the process of returning the state's investment and normalisation of the share register. AIB owes the Irish taxpayer an immense debt of gratitude for its support during the financial crisis," AIB CEO Colin Hunt said in a statement.

The finance ministry, which has also reduced its stake in Bank of Ireland to below 3% through a share trading plan over the last year, said that it would not sell any more AIB shares for 90 days.

Goldman Sachs and Goodbody Stockbrokers were the joint bookrunners on the placing. N.M. Rothschild has advised the government on its AIB share sales. ($1 = 0.9450 euros) (Reporting by Padraic Halpin, Editing by Louise Heavens)