(Bloomberg) – Volkswagen AG has reached an agreement with U.S. environmental regulators to fix or buy back around 80,000 Audi, VW and Porsche vehicles with tainted 3-liter diesel engines, nearing a resolution on a key aspect of the emissions-cheating scandal, people familiar with the discussions said.

Under an accord with the  Environmental Protection Agency and California's Air Resources Board, Volkswagen would get the go-ahead to fix some 60,000 vehicles and offer to repurchase about 19,000 older models that would be too complex to repair, said the people, who asked not to be identified because the talks are confidential. The recall plans involve a simple software update, and avoiding a full buyback of all the cars would save the company about $4 billion, the people said.

Larger engines

While Volkswagen has agreed to pay an industry-record $16.5 billion to resolve issues involving about half a million 2-liter diesel cars, it has struggled to reach an agreement over the larger engines. A deal would be a significant step toward emerging from a crisis that erupted last year when the company admitted that about 11 million diesel cars worldwide were outfitted with a "defeat device" to game U.S. environmental tests. 

The court handling the case hasn't approved a deal, so changes could still be made ahead of a court hearing on Nov. 30. Volkswagen also doesn't have an agreement with the owners of the 3-liter cars who have sued the company or with the Federal Trade Commission (FTC), which filed a lawsuit against the company for false advertising. Both the steering group for the car owners and the FTC are demanding that Volkswagen offer to buy back all of the tainted vehicles, which the carmaker is seeking to avoid, the people said.