Volkswagen reaches compensation deal with 80,000 U.S. owners

WASHINGTON (Reuters) - A federal judge said on Thursday that Volkswagen AG has reached an agreement in principle to provide "substantial compensation" to the owners of about 80,000 3.0 litre polluting diesel vehicles, a key hurdle to resolve the German automaker's emissions scandal.

U.S. District Judge Charles Breyer didn't disclose the amount of the owner compensation, which is not included in an earlier $1 billion settlement. Half of the compensation will be paid at the time Breyer grants final approval of the settlement. Earlier this week, Volkswagen reached the $1 billion settlement with U.S. regulators, offering to buy back about 20,000 of the vehicles and paying $225 million into an environmental trust fund to offset the vehicles' excess emissions.

(Reporting by David Shepardson; Editing by Jeffrey Benkoe)