The latest billion-dollar fine follows the car-maker being found guilty for similar offences in the U.S., where VW agreed to pay $US4.3 billion ($A5.7b) to resolve both a criminal and civil charge. "Volkswagen is committed to its responsibility for the diesel crisis and sees this as another important step to its management", it said in a statement.
Volkswagen's diesel emission scandal started back in September 2015, and it's still ongoing today.
In the spiralling scandal, Germany ordered Monday the recall of some 774,000 Daimler vehicles across Europe, citing illegal defeat devices.
This had led to 10.7 million cars "being advertised, sold to customers and placed on the market with an impermissible software function" in the US, Canada and worldwide between mid-2007 and 2015, the company said.
VW shares closed 0.1 percent higher at 159.78 euros.
Jaguar E-Pace crossover gets new tech
Jaguar says rough surfaces and off-road conditions are also sensed immediately, with the damping responding accordingly. Although adaptive suspension isn't new to Jaguar , it wasn't available with the E-Pace when it was launched past year .
Woman who got stuck in tailpipe answers the obvious question
She did, however, cop a citation from the McLeod County Sheriff's Office for underage drinking (the legal drinking age in the U.S. is 21).
Norwegian Lawmakers Nominate President Trump for 2018 Nobel Peace Prize
Trump has been cited as a possible nominee since Kim ended a series of provocative threats and missile tests past year . Trump's summit with Kim is the first time a USA president had met face to face with a North Korean leader.
"We must plan for interruptions to production in the third quarter", VW chief executive Herbert Diess told workers.
Poetsch, also CEO of VW's majority stakeholder Porsche SE (PSHG_p.DE), is separately being investigated by prosecutors in Stuttgart over the same suspicions.
Hausfeld represents aggrieved VW owners and shareholders on both sides of the Atlantic.
"The Braunschweig public prosecutor issues an administrative order against Volkswagen AG in the context of the diesel crisis and imposes a fine of EUR1 billion on Volkswagen AG", the company said in a statement.
Finance chief Frank Witter will update investors on August 1 on the implications of the fine for the carmaker's cash position, alongside its second-quarter results, VW said.
"The fact that the criminal risk has now been dealt with is good news", said Arndt Ellinghorst, an analyst with Evercore ISI.