Under the terms of the agreement, which still requires court approval, Volkswagen would fix 60,000 vehicles with affected 3.0 liter engines and repurchase 19,000 older models for which repairs would be too complex, Bloomberg reported citing anonymous sources close to the negotiations.
The agreement with the US Environmental Protection Agency and California's Air Resources Board does not resolve legal actions brought by owners of 3.0 liter cars or by the Federal Trade Commission, according to Bloomberg.
A settlement would close another major chapter in the company's emissions cheating scandal. Volkswagen last month concluded a record-setting $15 billion settlement concerning 2.0 liter diesel cars.
The company has found itself in a firestorm and seen sales plummet since admitting last year that it had deliberately configured as many as 11 million diesel-powered cars sold worldwide with "defeat devices" that reduced harmful nitrogen oxide output during emissions testing but allowed the cars to produce as much as 40 times permissible amounts during actual driving.