It’s the third phase of the sell off of the former state-owned telco.
Canberra says “mum and dad” investors will also be offered a discount to buy into the offer.
The government adds it will sell up to $8 billion worth of shares from its remaining stake in Telstra in two instalments, with the first price set at $2 per share.
But retail investors will get a discount of 10 cents on the first instalment, meaning they will pay $1.90, according to a prospectus for the offer launched.
The price of the second instalment, which will be payable in 18 months, will be set by an institutional bookbuild.
As well, existing Telstra shareholders will offered a extra sweetener of an entitlement to one T3 share for every two they own.
Labor attacks float
Labor says Telstra shareholders and the community should be furious at how the government's managed the sale of the telco.
Opposition treasury spokesman Wayne Swan says shareholders deserve much better from the government.
The prospectus for the sale of the third block of Telstra shares was launched at midday on Monday local time.
Mr Swan says he thinks people are disgusted with the incompetence they're seeing from the Howard government.
Labor spokesman for accountability Kelvin Thompson says the government's now spent 45 million dollars on advertising for all three Telstra floats, which is excessive.
Cousins factor
Australian Prime Minister John Howard says the dispute over Geoff Cousins election to the Telstra board won't affect the share price.
Mr Howard said the share market's already accepted the reality that Mr Cousins will be elected a director.
The government wants Mr Cousins a communications expert who's formerly worked for Mr Howard, made a director at the Telstra AGM later this year.
But Telstra's fighting the appointment concerned Mr Cousins is too close to the government.