AIG has said the jet-leasing business is a non-core asset. The company had previously planned to take the unit public.
The insurer has been selling off parts of its business to raise money to pay back the $182 billion bailout that it received from the government during the financial crisis of 2008. It was the biggest of the government's bailouts. The government, which earlier this year owned 77 percent of AIG stock, has been gradually selling its stake. As of Sept. 30, the U.S. owned just under 16 percent of AIG's outstanding common stock, according to a regulatory filing.
AIG announced it was in talks to sell to the Chinese investment group on Friday. Investors reacted by pushing AIG stock up 2.6 percent, 87 cents, to $34.13.