The Treasury Department said on Thursday it so far has taken in gross proceeds of $10.5 billion from the sale of 2.6 billion Citigroup shares under a written trading plan.

The Treasury said that after selling about a third of the common stock it acquired in bailing out the banking giant, it still holds about 5.1 billion Citi shares.

Treasury said the sales in the first two tranches sold by Morgan Stanley averaged $4.03 a share versus Citi's acquisition cost of $3.25 a share. That would produce a gross profit -- before sales costs -- of around $2 billion for the stock sold so far.

Treasury said it expected to continue selling Citi shares in the market in an orderly fashion once the blackout period set by Citigroup for its second quarter earnings period ends. The bank is expected to report second quarter results on July 16.

(Reporting by David Lawder, Editing by Chizu Nomiyama)