AIG chose Bank of America Corp , Deutsche Bank AG , Goldman Sachs Group Inc and JPMorgan Chase & Co to manage the sale of the government's 92 percent stake in the insurer, two people familiar with the situation said on Tuesday.

American International Group Inc and the government held a bake off in New York last Thursday, hosting CEOs and bankers from 10 of the world's largest firms to pitch for the right to manage the deal.

JPMorgan and Bank of America were two of the three joint lead arrangers on AIG's $4.3 billion bank credit lines, while Goldman and AIG have a long-standing relationship. The Deutsche Bank connection is less clear, although AIG is expected to pitch investors aggressively for a large, global shareholder base.

The winning banks are expected to split a fee that is less than the 75 basis points of the offering value the government paid last year for the initial public offering of General Motors Co . The fee could be closer to 50 basis points, a third person said.

That is significantly less than the usual fee for a secondary offering of this size, although the banks are expected to make up for the lost revenue with the prestige of managing a marquee deal and the chance at future AIG business.

Sources have said the process likely will begin with a secondary offering in May that could be one of the 10 largest in history. The government is expected to sell at least $15 billion in AIG shares then and the company is expected to sell another $3 billion on top of that.

(Reporting by Ben Berkowitz and Clare Baldwin; editing by Robert MacMillan and Andre Grenon)