The US Environmental Protection Agency (EPA) filed a lawsuit against FCA in May this year, arguing the company used a 'defeat device' in 104,000 Ram 1500 pickup trucks and Jeep Grand Cherokee SUVs fitted with the 3.0-litre EcoDiesel engine.
According to the EPA, software in the vehicles "cause the vehicles' emission control systems to perform differently, and less effectively, during certain normal driving conditions than on federal emissions tests, resulting in increased emissions of harmful air pollutants.
Perhaps unsurprisingly, the company announced plans to "vigorously defend" itself, and outright denied it had engaged in "any deliberate scheme to install defeat devices."
The number of owners involved in the pending settlement hasn't been announced, but proposed settlements have been exchanged between the two parties in the civil suit, while talks between FCA and the Department of Justice are also ongoing.
According to a report by Reuters, FCA started working on a fix for the affected cars on December 17. Once it's complete (likely to take three months) the US government will have 30 days to review and, if it's appropriate, approve the solution.
FCA lawyers have said the company is confident it can continue selling the car after a software fix.