VW expected to offer to buyback U.S. diesel vehicles

(Reuters) - Volkswagen AG and U.S. officials have reached the framework of a deal ahead of a Thursday court deadline, to remedy problems caused by hundreds of thousands of vehicles that are emitting up to 40 times legally allowable pollution, two sources briefed on the matter said Wednesday.

The German automaker is expected to tell a federal judge in San Francisco Thursday that it has agreed to offer to buy back up to 500,000 2.0-liter diesel U.S. vehicles that used sophisticated software to evade U.S. emission rules.

Volkswagen may also offer to repair polluting diesel vehicles if U.S. regulators approve the fix as workable at a future date, the sources said. But it is not certain if those vehicles will be deemed fixable by the U.S. Environmental Protection Agency.

Separately, Germany's Die Welt newspaper reported Wednesday that the deal to settle the case would involve it paying each affected customer $5,000.

(Reporting by David Shepardson; Editing by David Gregorio)