The bank - which is 73% owned by the taxpayer - has paid the government £1.2bn to bring to a close the Dividend Access Share scheme (DAS), which gave Her Majesty's Treasury a priority over dividends.
The DAS was enforced by the government in 2009 after the bank received a £45bn bailout in the wake of the financial crash.
The government aims to sell its stake in RBS over the next five years, but was recently forced to delay plans to sell its 10% stake in Lloyds Banking Group following increased market volatility.
Shares were down 2%.
Group chief executive Ross McEwan said: "This is another important milestone in our plan to resume capital distributions to our shareholders, and represents one less hurdle in our path to build the number one bank for customer service, trust and advocacy."
RBS racked up its eighth year in a row of annual losses when it announced its full-year results in February.
The group posted a loss of £2bn, although this is down on the £3.5bn deficit it reported a year earlier.
The bank said it has set aside £3.6bn in conduct charges. This includes £2.1bn to cover expected legal action on US residential mortgage-backed securities, as well as £600m extra for payment protection insurance (PPI).
Since then, the bank has moved to cut costs, announcing earlier this month that it would slash 550 jobs and replace some face-to-face advisers with an automated system.
The high street lender said 220 staff would be shed from its investment advice team as part of a shake-up, which will see face-to-face advice only offered to customers investing £250,000 or more.
The bank said it will also scale back its protection business to a telephone-only service, triggering the loss of 250 jobs from its protection products team.
Laith Khalaf, senior analyst at Hargreaves Lansdown, said the "payment to the treasury represents a step in the rehabilitation of RBS into a normal bank, but there's still an awfully long way to go.
"Dividends have been pushed back until the full extent of US conduct costs is out in the open, and the share price is still languishing well below what the government paid for the bank, which means it's going to be some considerable time before the bank is weaned off taxpayer support."