Aegon says it plans to repay the money, which it obtained in 2008 as the U.S. financial crisis spread to Europe, by the end of 2011. Aegon will start plugging away at the debt via a 500 million euro payment this month.
As part of the deal it will keep its dividends frozen and not pursue any acquisitions until the money is paid back.
Additionally, Aegon will only have to pay 800 million euros extra back to the state, instead of the 1 billion euros required under the original deal.
According to Aegon Chief Executive Alex Wynaendts, the company would fund the repayments with some mix of cash, selling operations, and issuing new securities.
"We cannot rule out any options at this time," he said.
Aegon plans to sell its Transamerica reinsurance business in the United States, where it does two-thirds of its business.
Last week the company reported second quarter net profit of 413 million euros (U.S. $532 million), from a loss of 161 million euros in the same period a year ago and up 11 percent from the first quarter.
Investors cheered the developments, and Aegon's share price was up 4 percent in early Amsterdam trading.
SNS Securities analyst Maarten Altena said the announcement "removes uncertainty for investors" about possible concessions the EU might demand regarding the repayment.
"More importantly, we believe today's statements to substantially reduce the probability of an equity issue, which would disappoint investors again in a short period and result in dilution," he said.
Wynaendts said due to measures the company has taken to reduce its cost base and shed risky businesses, Aegon can live with a smaller capital surplus. But he declined to give specifics of how much it could be reduced.
"Let's first see how the world develops," he said.
In the second quarter Aegon reported a capital surplus of 7 billion euros under European accounting rules, and its solvency ratio slipped to 200 percent from 205 percent in the first quarter.