Volkswagen has agreed to recall 83,000 3-liter diesel vehicles with model years between 2009 and 2016, in a deal with regulators, the Environmental Protection Agency said Tuesday.

The company said, specifically, it will recall 63,000 model year 2013 to 2016 vehicles. Volkswagen has the option of buying back, modifying or terminating the leases of the 20,000 model year 2009 to 2012 vehicles. The emissions modification must be approved by regulators.

Hinrich Woebcken, president and CEO of Volkswagen Group of America, said in a statement that the agreement is another "important step forward in our efforts to make things right for our customers," calling it a "fair and reasonable resolution."

Regulators said, however, that the settlement doesn't address potential criminal liability. It also doesn't resolve pending claims from consumers, individual owners or the Federal Trade Commission.

As part of the agreement, Volkswagen will also spend $225 million to fund projects focused on reducing nitrogen oxide emissions. Reuters reported that Cynthia Giles, EPA assistant administrator, estimated that the costs of buybacks, fixes and diesel offsets were about $1 billion, including the $225 million going into a trust fund to offset excess diesel emissions.

Volkswagen will also pay $25 million to the California Air Resources Board to support the use of zero-emission vehicles in the state.

The German automaker faced fines after it was caught last year cheating on American air pollution tests by the EPA. The scandal has damaged the company's reputation and hurt its sales.



The report comes after a series of delays this week to give the sides more time to negotiate.

Volkswagen previously reached a deal for the other 475,000 polluting vehicles in the scandal, according to The Associated Press. That deal gives owners of 2-liter diesel cars the option to have the company buy back their vehicle regardless of its condition.

U.S. District Judge Charles Breyer said German company Robert Bosch, which produced the software for Volkswagen diesels, has agreed in principle to settle civil allegations made by U.S. diesel vehicle owners. The settlement was expected to be worth more than $300 million, Reuters reported.

— Reuters and AP contributed to this report.