A total of 2.8m cars in Germany were fitted with emissions-rigging devices, the German transport minister, Alexander Dobrindt, told MPs in the country's lower parliamentary house the Bundestag.
This is the first time a country outside of the US has put a figure on the number of vehicles they expect to be caught up in the scandal.
Dobrindt: "It's now clear that vehicles in Germany are affected by these manipulations. Based on our current knowledge they are vehicles with 2.0 litre and 1.6 litre diesel engines."
Volkswagen's share price was over five per cent down in early afternoon trading, and has lost close to 30 per cent since the scandal began.
Yesterday, Dobrindt said VW had admitted rigging emissions tests in Europe in the same way as it falsified them in the US, but it was not known how many vehicles were affected in Europe.
Dobrindt said that random tests will be conducted on cars made by other manufacturers as well.
"It is clear that the Federal Office for Motor Traffic will not exclusively concentrate on the VW models in question but that it will also carry out random tests on vehicles made by other carmakers."
The company has undergone a scandal after it was found to have cheated on emissions tests in the US, subsequently becoming the the target of a criminal investigation by the US justice department.
Since then, the company announced it could have to recall 11m cars, set aside €6.5bn and Martin Winterkorn, the former chief executive, had to step down.