* Cameco to sell 78 pct of stake via bought deal

* To transfer remainder to Kyrgyz government

* Cameco said in April would eventually sell Centerra

TORONTO - Canadian uranium miner Cameco Corp has agreed to sell its stake in Asia-focused Centerra Gold for proceeds of C$872 million ($823 million), closing out an investment deal with Kyrgyzstan signed earlier this year.

Cameco said on Tuesday it will sell 88.6 million shares of its total 113.9 million share stake via a bought deal.

It will transfer the remainder to the government of Kyrgyzstan, fulfilling a condition of an investment deal reached earlier this year on Centerra's Kumtor gold mine.

Cameco currently holds 49 percent of Centerra, which it created in 2004 to spin off its gold assets from its core uranium business. At the time of the Kyrgyz agreement in April, Cameco said it planned to move ahead with the sale of its remaining stake.

The bought-deal sale -- through a syndicate of underwriters led by CIBC World Markets and RBC Capital Markets -- values the shares at C$10.25 apiece, an 18.6 percent discount to Centerra's closing price on Monday, but well above where the shares were trading just a month ago.

The junior miner's shares have risen sharply in the past two months, riding both the soaring price of gold and expectations that Cameco would soon sell its stake.

Shares of both companies were halted prior to the news release. Centerra was down 11.2 percent at C$11.19, underperforming other TSX-listed gold producers, while Cameco was down 4.7 percent at C$31.17.

Cameco, the world's No. 2 uranium producer, said it would use the proceeds of the sale to expand its uranium business as it tries to double output over the next nine years.

The deal in April calmed fears that Kyrgyzstan would nationalize Centerra's Kumtor mine. A Kyrgyz lawmaker had put forward a bill to take control of the country's gold mines in March 2007.

Kumtor is expected to produce about 500,000 ounces this year, while Centerra's other mine -- Boroo in Mongolia -- is expected to produce between 120,000 and 130,000 ounces.

($1=$1.06 Canadian) (Reporting by Cameron French; Editing by Frank McGurty)