Volkswagen agrees $4.3bn settlement over emissions scandal

VW will also plead guilty to breaking certain US laws as part of the settlement. Credit: Gareth Fuller / PA Wire

German car maker Volkswagen (VW) has agreed to a settlement worth $4.3 billion (£3.5bn) with the U.S. Justice Department over the emissions scandal.

Under the "concrete draft" of a criminal and civil settlement the company will also plead guilty to breaking certain US laws.

VW said final conclusion of the settlement is still subject to approval by the carmaker's management and supervisory boards.

The German company added that the impact of the deal on its 2016 financial results cannot yet be calculated.

The scandal began in September 2015 by US environmental regulators who found that VW had installed "defeat device" software which switched engines to a cleaner mode when they underwent official testing.

VW admitted using software in hundreds of thousands of US diesel cars to cheat exhaust emissions tests and make them appear cleaner than they were on the road, and that up to around 11 million vehicles could have similar software installed worldwide.

The ensuing scandal has cost the company more than $18.9 billion (18 billion euros) and led to the removal of its longtime CEO Martin Winterkorn.