The highest German civil court ruled that Volkswagen had to pay compensation to a driver who bought one of its diesel minivans with emission-reducing software.
The ruling sets standards for around 60,000 other cases in Germany.
Plaintiff Herbert Gilbert is partially reimbursed for his vehicle, taking into account depreciation.
VW has already settled a separate class action lawsuit amounting to 830 million euros with 235,000 German car owners.
Since the scandal broke out in 2015, more than EUR 30 billion in fines, compensation and buyback programs have been paid worldwide.
VW announced at the time that it had used illegal software to manipulate the results of diesel emission tests.
The company said that approximately 11 million cars were equipped with the “shutdown device” that alerted diesel engines when they were tested. The engine would then change its output to improve the test result.
Volkswagen has taken numerous legal steps worldwide, including the UK.
Around 90,000 drivers in England and Wales have filed suit against VW, Audi, Seat and Skoda, which also belong to the Volkswagen Group.
Last month her case passed its first hurdle before the high court when a judge ruled that the software installed in the cars was actually a “defeat device” according to EU regulations.
The current and former executives of the car manufacturer are being prosecuted in Germany.