Daimler reportedly has agreed to a US$1.5bn settlement in its US diesel emissions cheating case.

A federal judge in Washington, DC gave final approval to a settlement, thedetroitbureau.com said. The fine was for violating the Clean Air Act and evading California state law by cheating on emission tests and employing unlawful defeat devices on 250,000 vehicles equipped with diesel engines.

The resolution ends a major enforcement action against Daimler by the US Department of Justice, the Environmental Protection Agency, and the California Air Resources Board, the report said.

The settlement covers roughly 250,000 passenger cars and Sprinter vans sold primarily between 2009 and 2016. All the vehicles are equipped with diesel engines.

The estimated $1.5bn included $875m in civil penalties and around $70.3m in other penalties.

According to thedetroitbureau.com, Daimler will also extend the warranty period for certain parts in the repaired vehicles, perform projects to mitigate excess ozone-creating nitrogen oxides emitted from the vehicles, and implement new internal audit procedures designed to prevent future emissions cheating.

The recall programme and federal mitigation project were expected to cost the company about $436m. The company would pay another $110m to fund mitigation projects in California. Taken together, the settlement was valued at about $1.5bn, according to the EPA.

The report said the EPA discovered the defeat devices in Daimler vehicles through testing conducted in the wake of the Volkswagen scandal at the National Vehicle and Fuel Emissions Laboratory. The agency found several devices in Daimler diesel vehicles that were not described in the application for the certificate of conformity that purportedly covers each vehicle.

Mercedes allegedly sold 1m illegal diesels between 2008 and 2016, thedetroitbureau.com.

As part of the settlement, Daimler agreed to implement a recall programmeme to repair the noncompliant vehicles, offer an extended warranty on repaired vehicles, in addition to paying the $875m fine.

In a separate settlement with California, Daimler will mitigate excess emissions from more than 36,000 of the noncompliant vehicles in the state.

In addition, in a separate administrative agreement with the United States Customs and Border Protection, Daimler resolved allegations of illegally importing many of the noncompliant vehicles, the report said.

The settlement requires Daimler to update the software and certain hardware to remove all defeat devices and ensure the vehicles comply with all applicable emission standards, thedetroitbureau.com said. The hardware changes vary across the various electronic module controller or EMCs. Each vehicle also will receive a new NOX sensor, and any vehicle not already equipped with a copper catalyst will have one installed as part of the settlement.

"The consent decrees provide relief to the parties now, as compared to the potential years of litigation the parties could face if the United States and California elected to pursue their claims to trial," Judge Emmet Sullivan was quoted as noting in the legal memorandum attached to the settlement.