Finance Minister Mathias Cormann announced the pre-registration plan on Sunday, which comes ahead of the expected release of the prospectus in late October and a listing of the fund on the sharemarket by the end of the year.

And Senator Cormann has predicted "strong interest" in the sale of the health fund from mum and dad retail investors.

"We have made a judgment that market conditions are right, which includes a judgment about the level of retail interest which we do expect to be strong," he said.

The sale of Medibank Private, which is longstanding Coalition policy, is tipped to generate as much as $4 billion for the federal government.

Senator Cormann said the sale of Medibank, which covers 3.8 million Australians, would not drive up premiums as the health insurance market was already well regulated.

"People are entitled to speculate [about the price] but the Government is not going to speculate. Obviously our objective is to achieve, subject to a range of other objectives which we have well articulated, the best possible net return for taxpayers," he said.

"Medibank Private is a commercial business operating in a well-functioning, well-regulated market with 34 private health funds. There is no reason as to why the government should be involved in that commercial competitive market.

"We believe on behalf of taxpayers, that the capital that is currently tied up can be used better."