GIC is selling 93 million shares through an accelerated bookbuilding to institutional investors. After completing the offering, GIC will hold less than 3 percent of the outstanding shares in UBS, according to the statement on Monday.
The crisis "offered a rare chance to take major stakes in the global banking sector", GIC said in its statement.
UBS shares fell more than 1 percent after the news before paring losses to 0.7 percent.
Following the investment, former Singapore Prime Minister and GIC Chairman Lee Kuan Yew conceded in an interview in 2009 that GIC was "too early" in buying banks.More news: Vodafone transfers a 35% interest in Safaricom to Vodacom
The fund said, however, that its investment in USA bank Citigroup Inc, also made at the height of the global financial crisis, was in the black and that combined returns for UBS and Citi were positive in "mark-to-market terms".
GIC had bought into Switzerland's biggest bank early in the financial crisis, purchasing bonds that converted into stock when UBS needed capital to cover losses on subprime mortgage bonds.
GIC measures its performance on an overall portfolio basis, based on long term rather than annual returns.
Now, the Government of Singapore Investment Corp., or GIC, will sell the bulk of its stake in UBS, into which it had poured 11 billion Swiss francs in 2007.More news: Trump says he did not ask Comey for his loyalty
According to the Business Times, "GIC took stakes in UBS and Citigroup early in the financial crisis as part of a tactical move into a beleaguered financial sector".
The Singapore group said in its statement Tuesday that while it lost money in UBS, it has "earned a positive return" on its Citigroup investment.
The sovereign fund converted its 11 billion franc investment in UBS notes into shares in 2010.
Analysts say UBS is focused on its wealth management business after giving up ambitions to become a top global investment bank.More news: Spurs fans will absolutely love this stirring montage of White Hart Lane