US and Californian environmental authorities have approved a plan by Volkswagen for modifying thousands of cars it sold in the US equipped with illegal software that can spoof emissions tests.
The Environmental Protection Agency and the California Air Resources Board approved the emissions remedies, the agencies said on Monday in a news release.
It means the German carmaker can repair most of the vehicles rather than buy them back as part of a settlement of a class-action lawsuit, potentially saving the company billions of dollars.
The cars are sport utility vehicles (SUVs) with 3.0 litre diesel engines. About 38,000 vehicles made by VW and its subsidiaries Audi and Porsche are affected. The models are the VW Touareg, the Audi Q7 and the Porsche Cayenne.
The approved fixes will remove the so-called "defeat device" software that made it appear the vehicles' emissions during testing were below the legal limit.
The company early on had to commit to the expensive buy-back of about 20,000 of the nearly 80,000 larger diesel vehicles equipped with the software.
The EPA and CARB first accused VW of equipping its cars with the emissions-cheating software in September 2015. Since then it has paid more than 25 billion euros ($A37 billion) in penalties and compensation.
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