The imaging giant is planning to use a $581m tax rebate and cash it earned when it sold its healthcare imaging business last year to fund the buyback.

The group is presenting the buyback as a sign of its strength and confidence in its financial position. Antonio Perez, chairman and chief executive, said: "Our board's decision to authorise this repurchase initiative underscores the rising confidence we have in Kodak's product portfolio, in our current financial position, and in the execution of our strategy."

The tax windfall relates to a loss made 14 years ago in 1994 when Kodak sold a subsidiary called Sterling Winthrop. The US Inland Revenue Service initially did not recognise the loss, but later revised its regulations to recognise it and therefore allow Kodak to reclaim the money.

However, some financial analysts quoted in reports on the buyback have suggested that it is also an indication of Kodak's current low share price – Kodak stocks have lost almost half their value in the last year.

Ulysses Yannas, a broker with Buckman, Buckman, Buckman & Reid in New York, told forbes.com: "Your stock is in the dumps and that's when you buy back. This was a masterful way of doing it. Besides everything else, this demonstrates confidence that they're doing well on their (latest four-year) program."

News of the buyback comes after a successful Drupa for Kodak, where its Graphic Communications Group made its show debut and presented a number of major innovations including the Stream concept inkjet press.