By Robb M. Stewart 

MELBOURNE, Australia--Australia's government appointed three banks to help manage the sale of the country's largest health insurer and raise as much as 4 billion Australian dollars (US$3.75 billion), the first in an ambitious program of state-owned asset sales.

Finance Minister Mathias Cormann on Thursday said Deutsche Bank AG, Goldman Sachs Australia and Macquarie Capital were selected from 11 bids to act as joint lead managers for the initial public offering of Medibank Private.

The IPO is planned for the financial year beginning in July, although the precise timing and structure of the deal have still to be determined.

The federal government has ambitions to raise up to A$130 billion to help close a budget deficit and fund new infrastructure such as airports from the sale of state assets ranging from ports to electricity networks to the Australia Post mail service.

Mr. Cormann said in a statement that further managers for the sale could be named later, and the government would appoint companies nearer to the IPO that would assist the sales syndicate and focus on retail selling roles. The government also has extended the contracts of advisers for the IPO, including with financial advisory firm Lazard Pty. Ltd., legal firm Herbert SmithFreehills, accountants Ernst & Young, and Newgate Communications.

Medibank Private has 3.8 million members and had a profit of A$315 million last year. It has around 30% of the Australian health-insurance market, topping rivals such as NIB Health Funds Ltd. and HCF, which have 900,000 and 500,000 members, respectively.

Governments around the world are weighing asset sales to plug holes in their budgets as tax revenues fall. Last year, the U.K. sold the majority of its interest in state postal service Royal Mail through an IPO in London, raising more than GBP1.7 billion (US$2.86 billion). New Zealand's conservative government also has raised billions of dollars with the sale of stakes in power generators and national flag carrier Air New Zealand Ltd. in an effort to return its budget to surplus by 2015.

Write to Robb M. Stewart at robb.stewart@wsj.com

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