People walk past the Citigroup building, in New York, November 17, 2008.

A traffic light is seen in front of a Citibank branch in New York October 6, 2008.

NEW YORK, Nov. 24 (Xinhua) -- The U.S. government agreed Sunday to rescue Citigroup providing a package of guarantees, liquidity access and capital.

The U.S. government would protect 306 billion U.S. dollars of loans and securities on Citigroup Inc.'s books against losses and inject 20 billion dollars into the bank from the Treasury's 700-billion-dollar Troubled Asset Relief Program.

In a joint statement released late Sunday night, the U.S. Treasury, the Federal Reserve and Federal Deposit Insurance Corp. (FDIC) committed to supporting financial market stability, which is a prerequisite to restoring vigorous economic growth.

"As part of the agreement, Treasury and the Federal Deposit Insurance Corporation will provide protection against the possibility of unusually large losses on an asset pool of approximately 306 billion dollars of loans and securities backed by residential and commercial real estate and other such assets, which will remain on Citigroup's balance sheet," said the statement.

As a fee for the arrangement, Citigroup will issue preferred shares to the Treasury and FDIC.

In addition, the Federal Reserve stands ready to backstop residual risk in the asset pool through a non-recourse loan.

In exchange for the government's 20-billion-dollar injection, Citigroup would offer preferred stock with an 8 percent dividend to the Treasury.

According to the agreement, Citigroup will comply with enhanced executive compensation restrictions and implement the FDIC's mortgagemodification program.

"With these transactions, the U.S. government is taking the actions necessary to strengthen the financial system and protect U.S. taxpayers and the U.S. economy," added the statement.

Citigroup lost 60 percent of its market value last week as investors worried the risky debt on Citigroup's balance sheet will turn into losses.