The company's Dieselgate bill in the U.S. is now at least $25 billion

Volkswagen and a federal judge have agreed on a $1.22-billion fine for the automaker's 3.0-liter TDI engines fitted with a cheating device. The German manufacturer will have to fix or buy back 80,000 vehicles in the United States equipped with the motor.

Volkswagen will have to pay between $7,000 and $16,000 to each owner of a 3.0-liter TDI car who decides to keep it and get it fixed by the company. The company could also be forced to pay up to $4.04 billion if regulators don't approve fixes for all 3.0 TDIs.

A spokeswoman for the company, Jeannie Ginivan, is quoted by Reuters as saying the settlement "marks an important milestone for Volkswagen and means that a resolution is available to all of our customers."

U.S. District Judge Charles Breyer approved the penalty less than a year after he approved another settlement for Volkswagen linked with the smaller 2.0 TDI engines. Last fall, VW agreed to pay $14.7 billion and to fix or buy back 475,000 cars fitted with that motor – and more than half of the affected vehicles have already been repurchased or repaired.

The same judge also granted German parts supplier Bosch with a settlement, which says the company has to pay $327.5 million to owners of diesel Volkswagen vehicles in the United States for its role in developing the engines.

According to a recent report, Volkswagen could be forced to sell Ducati in order to cover all the expenses surrounding the Dieselgate. Late last month Reuters reported the German company is currently contacting potential buyers, but a final decision has not been taken so far.

Volkswagen also decided to axe the development of a new generation of small diesel engines and to replace them with hybrid systems. There will be no replacement for the current 1.6 TDI – instead, the money will be invested in new electric systems that will be used in the future hybrid powertrains.