The report, published by News Corp website news.com.au, alleges the Department of Infrastructure and Regional Development initiated the investigation after similar steps were taken by overseas governments, most recently France.
Fiat Chrysler's global management has maintained throughout that its vehicles comply with emissions regulations in every market that it offers vehicles.
The News Corp report includes a statement from Infrastructure acknowledging the overseas investigations, but offering no confirmation of any local action.
Responding to the report, the car maker said: "The article is categorically incorrect. FCA Australia denies the existence of any such investigation."
The Department of Infrastructure and Regional Development, in a statement distributed by FCA Australia, said: "The News Corporation media report is factually incorrect. The Department of Infrastructure and Regional Development is not currently undertaking a formal investigation into the diesel emissions of Jeep, Alfa Romeo, Fiat or Chrysler vehicles supplied to the Australian market by Fiat Chrysler Australia."
Although it has confirmed no investigation is underway here, the ongoing ACCC action against Volkswagen and Audi in Australia will have government watching the overseas investigations closely.