Volkswagen has said that prosecutors in the German city of Braunschweig levied the £880m fine, saying the carmaker failed to properly oversee its engine development department’s activities, resulting in about 10.7m diesel vehicles with illegal emissions-controlling software being sold worldwide.
The firm said it hoped that paying the fine would have “positive effects on other official proceedings being conducted in Europe against Volkswagen” and its subsidiaries.
The fine comes two days after prosecutors in Munich widened their emissions cheating probe into Volkswagen’s luxury carmaker Audi, to include the brand’s chief executive Rupert Stadler among the suspects accused of fraud and false advertising.
It also comes a week after Volkswagen warned it would have to halt production at its main Wolfsburg plant for several days in the next quarter as it adapts to rigorous new EU emissions tests.
“We must plan for interruptions to production in the third quarter,” VW chief executive Herbert Diess told workers.
He added that staff should expect “closure days” in late summer and September.
The scandal, which came to light in the US in 2015 after VW admitted to circumventing the emissions control system there for diesel vehicles sold since 2009, has so far cost the German automaker $4.3bn (£3bn) in federal penalties over there.
Volkswagen was sentenced to three years probation in the US in April last year after pleading guilty to three felony counts.
The firm must also buy back or fix 85% of the vehicles involved in the case by June 2019, or face higher payments for emissions.
So far it has spent more than $7.4bn (£5.3bn) buying back about 350,000 US vehicles, some of which will be resold while others will be destroyed.
That requirement has led to the establishment of ‘diesel car graveyards’ to store the vehicles across the US.
By mid-February the firm had issued 437,273 letters offering nearly $8bn (£5.7bn) in compensation and buybacks.