The deal does not include any admission of guilt or wrongdoing by the automaker.
The fines will come to about $305 million, according to the source, to be split among the US Justice Department, the Environmental Protection Agency and the California Air Resources Board. Most of the rest of the money will be in the form of civil settlements, to both car and truck owners and to various state attorneys general who brought their own actions against the automaker.
The company will make payments of up to $2,800 per vehicle to the owners of 100,000 diesel-powered Jeep SUVs and Ram pickup. The vehicles involved are the 2014, 2015 and 2016 model year Jeep Grand Cherokees SUVs and Dodge Ram 1500 trucks with 3-liter diesel engines.
Volkswagen admitted that its software was improperly installed to deceive emission-testing equipment by making engines put out much lower levels of the pollutants when being tested than they did in real-world driving situations.
But Fiat Chrylser has always maintained that it did nothing wrong and that the software for its diesel car engines is a legitimate way to meet emissions rules. The company said the software is there to protect the engine from damage during testing rather than to cheat on emissions tests.