Finance Minister Arun Jaitley said the Cabinet has given "in-principle" approval for disinvestment of Air India.
A group will be set up to finalise modalities/details of disinvestment of Air India, including the quantum of stake sale, he said.
The civil aviation ministry is charting out the disinvestment of the state-run carrier.
Surviving on taxpayers' money, Air India has been in the red for long and various proposals, including government think tank Niti Aayog's suggestion for complete privatisation, have been made.