More than seven billion shares in the Hong-Kong based division have been sold, representing a 58 per cent stake in the company, reports Bloomberg.
The IPO was extended from an initial 5.86 billion shares, which made up 49 per cent of the unit.
AIA sold its stock at HK$19.68, the top end of its marketing range, the company revealed in a statement.
A further 1.05 billion shares in the unit could be sold off in AIA's opening month as a listed company, meaning the final amount raised could eventually total $20.5 billion.
If this goes ahead, AIG's stake in the company will fall to 33 per cent.
Mark Tucker, chief executive officer of AIA, said: "We are very pleased that the offer price has been set at the top end of the range, reflecting a very strong vote of confidence in AIA's future and our ability to capture and realize the exceptional growth potential of the Asia Pacific region."
AIG is looking to make the divestments in order to pay back the US government for the bailout funding it received as it was hit by the effects of the global financial crisis.
The company's chief executive officer Robert Benmosche has said the money raised by the AIA IPO will put the company "well within striking distance" of returning its bailout funding to the state.
Earlier this year, the proposed $35.5 billion sale of AIA to Prudential collapsed after the latter company's shareholders protested that the deal would not provide them with good value.
Prudential then asked AIG to accept a bid closer to $30.4 billion for the unit, but this offer was turned down by the American firm.
By Claire Archer