The relevant vehicles could emit up to 40 times the legal limit for nitrogen oxide, said the EPA.

According to Clean Air Watch, an environmental advocacy group, “The charges here are truly appalling: that Volkswagen knowingly installed software that produced much higher smog-forming emissions from diesel vehicles in the real world than in pre-sale tests”.

The Environmental Protection Agency (EPA) issued a notice of violation and accused the company of breaking the law by installing software known as a “defeat device” in four-cylinder Audi and Volkswagen models in the years 2009-2015.

It has been found that the German automaker sold almost 482,000 diesel vehicles from 2009-2015 without having fulfilled the requirements. The pollutants are linked to a range of health problems, including asthma attacks, other respiratory diseases and premature death. The violation of the CAA also covers one Audi model. The luxury brand is owned by Volkswagen.

Top EPA officials made the announcement alongside the California Air Resources Board, which is separately investigating the alleged use of the software, which EPA describes as a “defeat device”.

VW said it is cooperating with the investigation.

The EPA and CRB discovered that a sophisticated software algorithm on certain Volkswagen vehicles detects when the auto is undergoing emissions testing and only turns on the emissions control system during the test, according to a release from EPA.

The cars were all built over the course of the last seven years, and include Jetta, Beetle, Golf, and Passat models.

The California Clean Air Board (CARB), in a separate action, announced that it was conducting an investigation into VW’s action and issued a compliance order to the automaker.

It could take up to a year for VW to develop a recall plan, regulators said, and in the meantime owners are told to keep driving as usual – and keep checking the mail for a notice from VW. The penalties under the U.S. federal Clean Air Act could reach $37,500 per vehicle , or more than $18bn.