Volkswagen is making progress in its negotiations with the federal government to work out the details of a settlement that would compensate owners of nearly 600,000 diesel-powered vehicles that included emissions cheat software.

The automaker will give buyers the option of selling the cars back or getting them fixed, Senior U.S. District Judge Charles Breyer announced April 21. Volkswagen is now working to finalize agreements with U.S. government agencies, regulators, and a steering committee for plaintiffs.

"These agreements in principle are an important step on the road to making things right, as we work to earn back the trust of our customers, dealers, regulators and the American public," according to a company statement.

The initial settlement came for vehicles powered by a 2.0L clean-diesel engine. The automaker must also gain approval of a solution for its 3.0L V-6 TDI that powered the Porsche Cayenne and other vehicles.