Chancellor George Osborne said moving the bank into the private sector would "enable it to access larger pools of capital".
It is expected the government will sell a majority share of the bank within the next five years.
GIB chief executive Shaun Kingsbury said support from the government would become unsustainable: "While capital from the UK government was an important start, it will not be enough to sustain our level of investment.
"From the outset it was always part of the plan that we would need to raise additional capital from the private sector to supplement government funding," he added.
The bank was launched in November 2012 by the government, with more than £3 billion (€3.7 billion at the time) of funding.
It was tasked with funding low-carbon infrastructure projects in a bid to attract private investment. Offshore wind has been a core focus of the bank.
The announcement was made at the bank's annual review. Over the past 12 months, GIB invested £723 million (€1 billion) in 22 new green energy projects. The bank also said it was now profitable as its investments begin to make returns.
GIB has support seven offshore projects in the UK, most recently taking a 19% stake in E.on's 400MW Rampion project.
The Green Investment Bank has supported seven offshore wind projects in the UK, with a total investment of approximately £977.1 million. Walney, Rhyl Flats, London Array, Gwynt y Mor,Westermost Rough and Sheringham Shoal have all benefited from its support.