Mercedes will offer a voluntary emissions fix for three million of its diesel-engined cars across Europe.
The news "came just hours after the regional government in the company's home region of Baden-Wuerttemburg agreed to abandon proposals to restrict diesels if older diesels could be mechanically fixed to pollute less", reports the Daily Telegraph.
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"Hundreds of thousands" of Mercedes will be recalled, adds the newspaper, including the "popular" C and E-Class saloons.
Mercedes parent company Daimler has been under pressure over claims it sold "over one million cars with excess emissions in the US and Europe between 2008 and 2016", says AutoExpress.
It is believed German authorities have issued a search warrant to investigate the claims, continues the magazine, adding the company could also face "an investigation by the US Justice Department and the Environmental Protection Agency in the United States".
Daimler told the BBC the €220m (£195m) fix "was not linked" to any investigation by authorities.
It added: "The service actions involve no costs for the customers. The implementation of the measures will be starting in the next weeks."
Owners of diesel-powered Mercedes vehicles will be able to get the emissions update from next week, although the company says some may have to wait longer due to the high-volume of vehicles affected.