Daimler AG is to pay $2.2 billion ($A2.7 billion) for violating clean air laws and to resolve claims from 250,000 US vehicle owners.

The German car maker and its Mercedes-Benz USA LLC unit disclosed on August 13 it had reached a settlement in principle resolving civil and environmental claims tied to 250,000 US diesel cars and vans after using software to evade emissions rules.

Daimler says it expects costs of settlements will total $US1.5 billion, settling with owners will cost another $US700 million and “further expenses of a mid three-digit-million (euro) amount to fulfill requirements of the settlements.

US Deputy Attorney-General Jeff Rosen said on Monday the settlements, which follow a nearly five-year investigation, will “serve to deter any others who may be tempted to violate our nation’s pollution laws in the future”.

In court documents, Daimler has agreed to pay 250,000 owners up to $US3290 each to get polluting vehicles repaired and agreed not to oppose paying $US83.4 million in attorneys fees and expenses for the owners’ lawyers.

Owners will get $US800 less if a prior owner files a valid claim.

The settlements require Daimler to address the vehicles’ excess emissions as part of binding consent decrees.

It will issue recalls and extended warranties but is not required to buy back vehicles unless unable to offer an emissions fix within a required timetable.

Diesel vehicles have come under scrutiny in the United States since Volkswagen AG admitted in September 2015 to installing secret software on 580,000 US vehicles that allowed them to emit up to 40 times legally allowable emissions.

In September 2019, Daimler in Germany agreed to pay a fine of 870 million euros for breaking diesel emissions regulations.