DETROIT (Reuters) - American International Group Inc and General Motors Co will rejoin the S&P 500 index this week, marking a key milestone in the recovery of two companies that needed billions of dollars to stay afloat during the financial crisis.

AIG and GM will rejoin the S&P 500 after the stock market closes on Thursday, the S&P Dow Jones Indices said on Monday.

The move represents a symbolic victory for AIG and GM, which have taken steps to overhaul their operations and return to viability since their near-collapse about five years ago.

Companies in this index are considered leaders in their industry, the S&P said on its website. Returning to the index will help boost shares, particularly important in the case of GM, which is still partially owned by the U.S. government.

AIG received $182 billion in U.S. funds, while GM took $50 billion during the economic recession in 2008 and 2009. The bailouts were highly controversial, but government officials said they were necessary to stabilize the weak U.S. economy.

In December, the U.S. Treasury Department announced it was selling its remaining stake in AIG. Taxpayers made a profit on the AIG bailout, a once unthinkable outcome.

Later that month, the U.S. Treasury said it would exit GM by early 2014. But unlike AIG's case, the U.S. government is likely to lose billions of dollars on GM.

GM will replace H. J. Heinz Co, while AIG will replace Baker Hughes Inc , the S&P said.

(Reporting by Deepa Seetharaman; Editing by Stephen Coates)

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