The purchase of up to 25 million ordinary shares could occur from October 15 through to October next year.
She said the board had taken into account the company's out-performance against the 2013 initial public offer forecast and the $100m lower than forecast capital expenditure.
Opposition parties said the buyback was an attempt to prop up the company's share price during the Meridian share sale.
Labour's state owned enterprises spokesman Clayton Cosgrove labeled it "an act of absolute desperation".
"Clearly the board could see the writing on the wall and knew the share price would fall even further.
"This is market interference, pure and simple. The Government will be very happy with this act as the falling Mighty River share price is scaring prospective Meridian investors away."
Green Party Co-leader Metiria Turei said the buyback "looks like an attempt to prop up Mighty River's share price ahead of the Meridian sale".
"There clearly isn't a market for the government's share sales. It should cancel the remaining asset sales now."
NZ First Leader Winston Peters said the buyback "smacks of deceit and desperation because Mighty River Power's forecast show that it could sell the shares to pay for dividends quickly, if need be to shore up investor confidence if they suspect Mighty River Power will not perform that well".
"Effectively the taxpayer, in the form of 51 per cent ownership of Mighty River Power, is buying back shares to artificially prop up the company's value and it is probably prompted by their concerns about the effect of the Meridian share float."
Through a spokeswoman, SOE Minister Tony Ryall said the buyback was a matter for the company but it was not an uncommon strategy.
"For example, Air New Zealand did the same in the last year and announced in September 2013 it was renewing its share buyback facility for another 12 months. The buyback has nothing to do with the IPO.
"The Opposition never tires of trying to sabotage the value of these companies to the detriment of every day New Zealanders, just to play politics."