Energy minister Josh Frydenberg said the sale was "fair value" and promised to never sell the asset to a private buyer.
"The Commonwealth is absolutely committed to keeping it in public hands. There's no talk about anything different to that," Mr Frydenberg told ABC Radio.
The Howard Government once considered selling off the federal government's stake in the Snowy Hydro, but canned the idea in 2006.
Mr Frydenberg said he did not think any future governments – Labor or Liberal – would ever sell the plant.
"Nobody can bind future governments but I don’t think it’s in the interests of any future governments, whatever their political persuasion, to do anything but keep this in public hands," he said.
"It's an iconic Australian asset."
The Snowy Hydro is considered one of Australia’s greatest engineering achievements. Construction began in the late 1940s in the post-war period.
Around 70 percent of the workers were European migrants from countries like Germany, Greece, Ireland, Italy, Britain, Norway, Poland and the Former Yugoslavia.
The $6-billion sale is not yet finalised. The Turnbull government will need to pass the funding, likely in the upcoming 2018 Budget.