The Treasury Department will give $5 billion to GMAC Financial Services LLC to prevent the company from filing for bankruptcy protection. But the move will cause General Motors Corp. to give up most of its control in its financing arm, the Associated Press reported.

Under the terms of the deal, the government will receive preferred shares of GMAC that pay an 8 percent dividend and warrants to purchase additional shares in exchange for the money. The Treasury Department also will lend up to $1 billion to General Motors to purchase additional equity that GMAC is planning to offer as part of its effort to raise more capital.

GMAC President Bill Muir said the deal would allow the company to return to “more normal financing volumes” after it mandated two months ago that consumers had to have a minimum credit score of 700 to obtain automobile financing.

The move could help stabilize the U.S. automotive industry and is on top of the $17.4 billion in loans the Bush administration agreed to give the industry on Dec. 19 to help prevent collapse.

However, as part of the government’s approval for GMAC to become a bank holding company, which allowed it to receive bailout funds, General Motors will have to reduce its stake in GMAC to less than 10 percent of the voting and total equity interest from its current 49 percent interest. Cerberus Capital Management, which owns the rest of the company, will reduce its stake to no more than 33 percent of total equity.