Hyundai and Kia have agreed to pay $100m fine for exaggerating the gas mileage in 1.2 million vehicles.
The ruling came from the US justice department which stated that the vehicles could emit approximately 4.75 million tons of greenhouse gases in excess of what the automakers certified to Environmental Protection Agency (EPA).
The car makers have agreed to reorganize their emissions certification group, improve management of test data to avoid emission miscalculation of greenhouse gas in future.
EPA administrator Gina McCarthy said: "Greenhouse gas emission laws protect the public from the dangers of climate change, and today's action reinforces EPA's commitment to see those laws through.
"This settlement upholds the integrity of the nation's fuel economy and greenhouse gas programs and supports all Americans who want to save fuel costs and reduce their environmental impact."
As part of settlement, the automakers will spend approximately $50m on measures to prevent any future violations as well as forfeit 4.75 million greenhouse gas emission credits that the companies previously claimed.
Hyundai Motor America CEO and president David Zuchowski said, "Hyundai has acted transparently, reimbursed affected customers and fully cooperated with the EPA throughout the course of its investigation."
"We are pleased to put this behind us, and gratified that even with our adjusted fuel economy ratings, Hyundai continues to lead the automotive industry in fuel efficiency and environmental performance."
The companies have been also ordered to audit their fleets for model years 2015 and 2016 to check the accuracy of the description and data provided to EPA.
