Volkswagen Group is to fix or buy back another 80,000 diesels in the US after agreeing a $1 billion legal settlement.

The deal covers VW, Audi and Porsche vehicles with 3.0-litre engines, reports Automotive News, bringing the total commitment cost to $7.5bn (£6.1bn) in the US to resolve claims over polluting diesels from owners as well as federal and state regulators.

But VW still faces the possibility of spending billions of dollars more to resolve a US Justice Department criminal investigation and federal and state environmental claims.

The agreement, settling part of litigation brought against VW by federal and California regulators, "is another important step forward in our efforts to make things right for our customers," Hinrich Woebcken, Volkswagen Group of America chief executive, said in a statement.

US district judge Charles Breyer announced the settlement during a hearing in San Francisco. Breyer in October approved VW's earlier settlement worth about $15bn with regulators and the US owners of 475,000 polluting diesel vehicles with smaller 2.0-litre engines, including an offer to buy back all of the cars.

The VW inquiry began with a notice of violation of the clean air act issued on September 18, 2015 by the United States Environmental Protection Agency (EPA) to the Volkswagen Group.

The notice alleged the group installed software on certain diesel vehicles to detect when the vehicle is undergoing emissions testing, and that the software turns on full emissions controls only during the test but reduces their effectiveness during normal driving.

The result is that cars that meet emissions standards in the laboratory emit nitrogen oxides at levels up to 40 times the standard during normal operation. According to the EPA, this software is a ‘defeat device’ and is prohibited under the US Clean Air Act.