Parliament cleared the way in late 2006 for the previous Howard government to sell the health insurer, but the public float was not scheduled to occur until after the 2007 federal election.
Mr Hockey estimated the sale of Medibank Private would raise between $3.5 billion and $4.5 billion, well above the $2 billion figure the Howard government estimated.
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"The coalition will sell Medibank Private and use every dollar from the proceeds to help pay down Labor's debt," he told the National Press Club in Canberra on Tuesday.
"Reducing the level of government debt is essential for the prosperity of all Australians."
Medibank Private began operating in July 1975, during the term of the Whitlam government.
