100,000 Jeep Grand Cherokee and Ram 1500 cars will be recalled.
Fiat Chrysler Automobiles (FCA) will pay out roughly US$800 million ($1.1 billion) in fines, fixes and compensation to settle claims some of its diesel engines cheated their way past emissions regulations.
The company had been accused of using an emissions-testing defeat device, like the one used employed by the Volkswagen Group in its Dieselgate engines, which could detect when a car was undergoing bench-testing and alter its operation to emit a legal quantity of pollutants.
Fiat Chrysler still maintains it "did not engage in any deliberate scheme to install defeat devices to cheat emissions tests", and all of its settlements "contain no finding or admission with regard to any alleged violations of vehicle emissions rules".
Revised software will be fitted to these vehicles, which Fiat Chrysler claims will not affect "average fuel economy, drivability, durability or refinement".
Owners of these vehicles will also receive a payment averaging US$2800 ($3900) and an extended warranty.
Fiat Chrysler will also pay fines totalling around US$400 ($557 million) to various government agencies, with US$305 million ($425 million) going to the US Environmental Protection Agency, Department of Justice and the California Air Resources Board.
The automaker will also help California pay for pollution mitigation programs, and finance the "upgrade of 200,000 high-efficiency catalytic converters through the aftermarket".
MORE: Fiat Chrysler coverage