The group said the recall affected 391,000 vehicles of its Toureg model and more than 400,000 of its Porsche Cayenne model built between 2011 and this year.
VW, which until recently had ambitions to become the world's biggest carmaker, is battling to resolve its deepest-ever crisis sparked by revelations that it installed emissions-cheating software into 11 million diesel engines worldwide.
The software, known as a "defeat device", limits the output of toxic nitrogen oxides to US legal limits during emissions test by regulators.
But when the vehicles are in actual use, the software allows them to spew poisonous gases at up to 40 times the permitted levels, giving the vehicle better acceleration and fuel economy.
On top of still unquantifiable regulatory fines in a range of countries, VW is facing a slew of legal suits, notably in the United States and Germany, from angry car owners, as well as from shareholders seeking damages for the massive loss in the value of their shares since September.