Volkswagen has announced that it received final court approval of a $14.7 billion settlement with consumers and government agencies over an emission scandal.

The deal could get nearly half a million diesel-powered cars off U.S. roads.

Judge Charles R Breyer of the US District Court for the Northern District of California granted final approval to the settlement agreement, which is the biggest automotive scandal settlement ever in the US.

Volkswagen last year admitted it equipped diesel-powered cars with devices meant to trick emissions tests.

The historic settlement is between Volkswagen Group, vehicle owners, California regulators, and the government. Under the settlement, Volkswagen will buy back vehicles from 475,000 US owners of 2-liter VW and Audi cars or provide a repair if such a fix is approved by the Environmental Protection Agency (EPA). Hundreds of employees have been tasked with handling buybacks. Owners can also obtain payouts from $5,100 to $9,852 if they choose the repair.

Concurrently, Judge Breyer also approved a consent decree between Volkswagen and the US Department of Justice on behalf of the Environmental Protection Agency (EPA) and the State of California by and through the California Air Resources Board (CARB) and the California Attorney General; and a consent order between Volkswagen and the US Federal Trade Commission. All three agreements were previously announced, Volkswagen said.

"Final approval of the 2.0L TDI settlement is an important milestone in our journey to making things right in the United States, and we appreciate the efforts of all parties involved in this process. Volkswagen is committed to ensuring that the program is now carried out as seamlessly as possible for our affected customers and has devoted significant resources and personnel to making their experience a positive one," said Hinrich J Woebcken, president and CEO of Volkswagen Group of America.

Volkswagen remains focused on resolving other outstanding issues in the US and continues to work towards an agreed resolution for customers with affected 3.0L TDI V6 diesel engines, it said.