By Pietro Lombardi

Daimler AG said late Monday that U.S. authorities have approved a settlement of civil and environmental claims related to diesel emissions.

The German car maker, which had already disclosed the main terms of the deal in August, said that thanks to this step it will avoid the risks and costs of long legal proceedings. As part of the agreement, it will pay around $1.5 billion, including penalties of $875 million. It will also pay roughly $700 million to settle a class action over the same issue.

"Daimler estimates further expenses of a mid-three-digit-million euro amount to fulfill requirements of the settlements," it said.

The agreement doesn't include an external compliance monitor.

The U.S. authorities involved in the agreement are the Environmental Protection Agency, the California Air Resources Board, the Department of Justice, the California Attorney General's Office, and U.S. Customs and Border Protection.

"The company denies the authorities' allegations as well as the class action plaintiffs' claims and does not admit any liability to the United States, California, plaintiffs, or otherwise," it said.

"The settlement resolves the company's pending civil proceedings with the U.S. authorities without reaching any determinations as to whether functionalities in Daimler's vehicles are defeat devices."

Daimler said it has "fully cooperated" with U.S. authorities.

The German company has also agreed to improve its compliance system, pay for some mitigation measures in the U.S. and launch later this year an emission modification program for eligible vehicles.

The company has set aside enough provisions to cover the cost of the settlement, which is subject to court approval and resolves claims related to emission control systems of roughly 250,000 diesel vehicles in the U.S.. 



  Write to Pietro Lombardi at pietro.lombardi@dowjones.com; @pietrolombard10