Fiat and Chrysler boss, Sergio Marchionne, has announced plans to pay off Chrysler's remaining US government debt, allowing Fiat to increase its stake in the American brand from 30 to 46 percent.

According to a US Securities and Exchange Commission filing, Chrysler owes the US Government $7.53 billion. Chrysler recently raised $7.5 billion in various loans, a revolving credit line and junk bonds, which will allow the company to pay off the remaining debt.

Mr Marchionne confirmed the plans at a recent Fiat dealership opening, saying,

"Tomorrow is payoff day. Chrysler will again regain its independence."

Paying off the debt will allow Fiat to purchase a further 16 percent stake in Chrysler, giving Fiat more control over the company. It will also allow Chrysler to profit up to $300 million a year extra as it won't have to pay interest on the government loan.

Mr Marchionne said he hoped to acquire a further five percent stake in Chrysler by the end of the year, tipping ownership over the 50 percent mark. As a part of the US contract, Fiat could potentially own up to 76 percent of Chrysler by passing more criteria and buying shares from United Auto Workers union.

The payoff will take place sometime today, US time.