VW has pleaded guilty to three criminal counts at a morning hearing in Detroit federal court for cheating on diesel emissions tests.

It was the first time the company has pleaded guilty to criminal conduct in any court in the world, a company spokesman said.

The company on Friday pleaded guilty to obstruction of justice and conspiracy over a brazen scheme to program nearly 600,000 vehicles to deceive the Environmental Protection Agency.

VW also agreed to pay US$4.3 billion (AU$5.7 billion) in criminal and civil penalties.

While that is the largest-ever fine imposed by the US government on an automaker, the company could have been on the hook for much more.

VW also agreed to pay US$4.3 billion (AU$5.7 billion) in criminal and civil penalties.Source:Getty Images

Federal sentencing guidelines called for fines from US$17 billion to US$34 billion due to the size of the plot and because VW employees destroyed documents and data after learning of the government investigation.

The crimes were well-planned and “went to a very high level in the corporate structure,” Assistant US Attorney John Neal told the court.

VW won’t know its punishment for sure until sentenced on April 21 by US District Judge Sean Cox in Detroit.

But prosecutors said that VW got a big discount on the penalty because it co-operated after fessing up to the crime.

The automaker’s general counsel, Manfred Doess, who was in court to agree to the plea, acknowledged the scheme lasted for nine years, from 2006 to 2015, and went to the level of just below the company’s management board.

VW lawyer Jason Weinstein said VW’s co-operation enabled US authorities to quickly file charges against six German supervisors in the case.

Only one is in US custody, though, and it’s unlikely the others will be extradited from Germany. One US employee also was charged.

“I’ve never seen a company act more swiftly or aggressively to hold itself accountable for what it did wrong,” Weinstein, a former federal prosecutor, told the court.

VW agreed to compensate owners for more than they would have received under criminal statutes, Neal said.

Car owners combined will get up to US$11 billion for vehicle buybacks and compensation as part of a civil settlement agreed to last year.

The company also agreed to environmental remediation and electric vehicle investment, and its behaviour will be watched by a monitor for three years.

Although both sides asked Cox to sentence VW on Friday, Cox said he wanted more time to study the terms of the punishment — including a US$2.8 billion criminal fine.

If Cox rejects the recommendation, VW can withdraw its plea. If the company wants to stick with a guilty plea, Cox still could order harsher penalties.

An lawyer for 300 VW owners who have opted out of a larger court settlement objected to the penalty, contending that owners should get restitution through the criminal court.

US District Judge Sean Cox aid he wanted more time to study the terms of the punishment — including a US$2.8 billion criminal fine.Source:AP

But the Justice Department and VW argued that the US$11 billion in restitution VW agreed to give owners in the civil lawsuit was sufficient.

That was part of a US$15 billion settlement with US environmental authorities and car owners approved last year.

VW’s total cost of the scandal now has been pegged at more than US$21 billion.

Although the cost is staggering and would bankrupt many companies, VW has the money, with US$33 billion in cash on hand.

After the hearing, Weinstein said he wasn’t surprised that Cox delayed the sentencing because a pre-sentence report is typical in criminal cases.

He also said Cox wanted more time to consider the objection. He’s optimistic the judge will accept the negotiated deal.

US regulators confronted VW about the software after West Virginia University researchers discovered differences in testing and real-world emissions of harmful nitrogen oxide.

VW later admitted that the cars were programmed to turn pollution controls on during testing and off while on the road.