An analyst said that Google's sale of the shares at a discount could be followed by other investors ditching their shares in the wireless service provider.
Google would reap just over $47 million from the sale of the shares, implying a massive loss of $453 million for Google, which invested $500 million in Clearwire in 2008. Google has already taken impairment charges of $443 million in recent years related to the investment.
Cable operators, including Comcast Corp
Since the cable operators have recently entered an agreement to resell mobile services from Verizon Wireless, the biggest U.S. mobile service, the concern is that they will also sell their stakes in Clearwire. Before the Verizon deal the cable operators depended on Clearwire as their wholesale provider.
With no strategic reason to hold Clearwire shares, these ownership stakes could also make their way into the market, said Evercore analyst Jonathan Schildkraut.
Time Warner Cable said it does not have any immediate plans to sell its stake in Clearwire.
A representative for Comcast were not immediately available for comment.
According to a document filed with regulators on Friday, Google said it would sell the 29.4 million shares it holds in Clearwire for $1.60 per share to Clearwire's other strategic investors, which include Intel Corp
Clearwire shares fell 13 cents, or 6 percent, to $2.13 on Nasdaq after the news.
If the Google sale is conducted on Nasdaq, it will start on or about February 27.
Google invested in Clearwire in November 2008 along with Intel, Comcast and others as the search giant wanted to help kick off the company's plan to build a high-speed network.
Shares in Google were up $3.56 at $609.67 in midday trade on Nasdaq.
(Reporting By Sinead Carew; editing by Mark Porter, Phil Berlowitz)