NEW YORK - Citigroup Inc plans to sell or spin-off its $10 billion Citi Private Equity unit in order to cut its debt, Bloomberg reported on Sunday, citing people familiar with the matter.

Citigroup made the decision to sell the unit last year, before President Barack Obama announced his plan to limit financial risk-taking by banks, according to the article. That plan could force banks to shed parts of their private equity operations.

One person familiar with the matter told Bloomberg that managers of the unit have discussed buying it out themselves with partners or other financing.

The unit oversees about $2 billion of Citi's money, with the remainder coming from outside investors according to the report.

Citigroup spokeswoman Shannon Bell declined to comment on the matter, when contacted by Reuters.

(Reporting by Michael Erman; Editing by Muralikumar Anantharaman)