FRANKFURT, Germany - Volkswagen has agreed to pay at least $1.2 billion in buybacks and compensation to settle claims from U.S. owners of cars with larger diesel engines rigged to cheat on emissions tests.

The proposed settlement filed last night in U.S. District Court in San Francisco covers some 75,000 Audi, Volkswagen and Porsche cars with 3.0-liter diesel engines.

Owners of older models that cannot be fixed to meet pollution standards will be offered buybacks and compensation. People with cars that can be fixed will get compensation of up to $16,114 - if VW can come up with a fix by an agreed deadline. If not, buybacks could push the cost as high as $4.04 billion.

Volkswagen has already agreed on a settlement for some 500,000 smaller, 2.0 liter diesel engines.