It said it was setting aside €6.5bn (£4.7bn) to cover costs of the scandal.
VW chief executive Martin Winterkorn issued a fresh apology for the test-rigging, saying he was "endlessly sorry" for the "manipulation".
Earlier, the boss of Volkswagen's US business, Michael Horn, admitted the firm "totally screwed up".
In the UK, the Department of Transport has added its voice to calls for an EU-wide investigation into the affair.
VW shares were down almost 20% on Tuesday in Frankfurt, after losing 19% on Monday.