U.S. authorities and Volkswagen reached a settlement regarding the carmaker's emission scandal, according to American media reports.
U.S. District Judge Charles R. Breyer in California said the company offers its consumers to buyback of vehicles or will fix them to meet the emission standards.
Breyer did not provide any financial details about the settlement but said customers who own diesel vehicles will be provided a 'substantial compensation.'
The judge ruled March 24 that Volkswagen (VW) should reach a deal with the Environmental Protection Agency (EPA) and California regulators by April 21 and outline a detailed plan for 580,000 diesel vehicles on U.S. roads.
However, the deal does not include 90,000 diesel models by Audi and Porsche vehicles --two luxury brands owned by the Volkswagen Group.
Bryer also noted that VW has to invest in initiatives to promote 'green' automotive technologies without specifying a figure.
Volkswagen and U.S. authorities now have until June 21 to file detailed proposals about the deal, the judge added, after which he is expected to present the settlement to the public to get opinions before signing the agreement.
The EPA claimed in September that VW manipulated emissions tests through software in some of its cars, resulting in 40 times more environmental pollution than other vehicles.
The company later admitted that 11 million of its diesel vehicles around the world had the software.
While the German automaker has fired 10 of its top executives in an internal investigation, CEO Martin Winterkorn also resigned.
The company announced that it had set aside a €6.5 billion (more than $7 billion) budget for damages.
By Ovunc Kutlu in New York