A German court has found ex-Audi boss Rupert Stadler guilty of fraud in connection with the Volkswagen diesel emissions scandal, making him the highest-ranking executive convicted over cars that cheated on emissions tests with the help of illegal software.

The Munich regional court handed Stadler a suspended prison sentence of 21 months on Tuesday, and also ordered him to pay a large fine, according to German news agency Deutsche Presse-Agentur.

He had pleaded guilty last month.

The former head of Audi, Volkswagen's luxury division, admitted wrongdoing and regret for his failure to keep rigged cars off the market even after the scandal became public knowledge.

Three lower-ranking managers also took plea deals as part of the same trial, which ran for two and a half years in Munich.

Prosecutors said Stadler had allowed cars with rigged software to be sold even after the scheme was uncovered by the US Environmental Protection Agency in September 2015.

The scandal cost Volkswagen more than $US30 billion ($44.7 billion) in fines and settlements, and saw two US executives sent to prison.

It pushed the entire auto industry away from reliance on diesel engines, which had been almost half the auto market in Europe, and helped accelerate the shift to electric vehicles.

AP