SINGAPORE—Pakistan plans to raise up to $816 million from selling a stake in state-owned Oil Gas Development Co. Ltd., in the country’s biggest share sale in eight years.

The government will sell up to a 7.5% stake in OGDCL in the domestic and international markets, providing much-needed foreign exchange in the country’s flagging economy.

According to a term sheet seen by The Wall Street Journal, OGDCL began testing…