Thiel sold his shares on Thursday and Friday last week at an average price of $20 per share, according to media reports.
He chose the end of the first lockup, a period in which early Facebook investors and insiders were barred from selling shares after the float, to essentially offload the bulk of his stake in the firm.
Reuters says that Thiel's sale of around 20 million Facebook shares was conducted as a result of a trading plan that he entered when the firm went public on May 18.
On that day, the PayPal co-founder also sold 16m shares at the company's higher IPO price of $38 a share.
Thiel was one of Facebook's earliest investors in 2004 by acquiring about a 10% stake in the social network. He still holds around 5.6m shares in the company.
Another filing has revealed that Accel Partners, the venture capital firm which was also an early Facebook backers, has distributed around 57.8m Facebook shares to the partners of its various funds. They are able to either hold or sell the shares as they choose.
Facebook, the only US company to ever float with a value of more than $100 billion, has seen its share price almost half since it went public, after investors became disillusioned with its longterm growth prospects.
There is unease over whether Facebook can diversify its revenue streams, particularly in terms of capitalising on the huge number of people who access its services on mobile devices.
Shares in Facebook closed yesterday on the US stock market at $20.01, compared to the $38 offering price in May. At one stage, the stock fell as low as $18.75.
Investors are also concerned in the near term about the more than 1.4 billion additional Facebook shares held by early investors and Facebook employees that are set to hit the market by the end of the year, as more lockup restrictions are lifted.
However, some analysts believe that the major sales of Facebook shares last week could have created a "buying opportunity" for some investors.
"For people who like the sector, and for people who like the company - which after all has a billion users - it may very well be that [last] week's selling just created a buying opportunity," Uri Landesman, president of Platinum Partners, told the Financial Times.