After the transaction, the bank's holding in CFHL will come down to 26 per cent, it added.
"The bank proposes to offload 4 per cent stake in Canfin Homes Ltd through empanelled merchant bankers/investment bankers," the bank said in a regulatory filing.
However, it did not provide further details.
CFHL had registered a net profit of Rs 74.99 crore during the second quarter ended September of this financial year, up 36.2 per cent from a year ago.
Total income rose to Rs 383.86 crore during the quarter, against Rs 332.37 crore earlier.
Canara Bank's stock closed 0.81 per cent up at Rs 368.35 while Canfin Homes surged 7.47 per cent to Rs 509.15 per cent on BSE today.