Volkswagen will provide a two year guarantee for the cars in Europe fitted with emissions cheating devices which it agreed to modify.
According to the auto maker, the two year guarantee will cover exhaust and emissions control parts.
The European Commission has been putting pressure on VW to compensate customers over its emissions scandal, but the company has refused.
And European class action lawsuits are picking up steam.
The guarantee has conditions attached -it will only cover certain car parts in vehicles that have been driven for under 250,000km (about 155,000 miles), and will depend on the service history of the car and the age of the affected parts.
In September 2015, VW admitted to US regulators that it had cheated on emissions tests there using software installed in as many as 11 million diesel vehicles sold worldwide – the majority of them in Europe.
In the aftermath of the diesel emissions scandal, VW agreed to modify millions of vehicles in Europe which were equipped with the software capable of undermining the emissions testing process.
The VW scandal widens as the automaker says it has found “irregularities” in carbon dioxide emissions levels, which could affect around 800,000 cars in Europe.
Volkswagen said the issue, which it came across while investigating diesel emissions, could cost about €2 billion.
Brands including VW, Audi, Skoda and Seat could be affected.
The issue mainly affects diesels, but could also include petrol models.
CO2 is a greenhouse gas, as opposed to the NOx involved in earlier allegations, which is a pollutant that causes lung disease.
The so-called irregularities that have now been found relate to the way in which CO2 emissions and fuel consumption were measured during the technical approval process for some models.
VW has not said whether or not it believes those irregularities were caused by deliberate action and it also has not specified which models are affected.
The company’s CEO Matthias Muller said: “From the very start I have pushed hard for the relentless and comprehensive clarification of events. We will stop at nothing and nobody. This is a painful process, but it is our only alternative. For us, the only thing that counts is the truth.”
The company’s board will talk to regulators about the consequences of its discovery, VW said in a statement, adding that “the safety of the vehicles is in no way compromised”.
The supervisory board issued a separate statement saying it was “deeply concerned” and promising “to ensure swift and meticulous clarification”.
The latest setback comes a day after US authorities accused VW of fitting nitrogen oxide defeat devices on its larger 3.0 liter diesel vehicles – charges which VW denied.
VW is already beset by scandal after the EPA discovered that some of its diesel vehicles were fitted with software that detected when they were undergoing emissions tests and changed the way they operated.
The so-called defeat device is understood to be in 11 million vehicles worldwide.
Earlier, it was announced that VW’s sales in the US had risen in October, despite the scandal.