German cities can ban older diesel cars to cut pollution
The Federal Administrative Court in Leipzig said the cities of Stuttgart and Duesseldorf could legally ban more older, more polluting diesel cars from zones worst affected by pollution.
Both the government and the car industry have opposed the bans, which set a precedent for the whole country.
They fear diesel owners' lives will be disrupted and vehicles will lose value.
The ruling by the country's highest federal administrative court came after German states had appealed against bans imposed by local courts in Stuttgart and Duesseldorf, in cases brought by environmental group DUH.
It said bans were necessary after about 70 German cities exceeded European Union nitrogen oxide (NOx) levels limits last year.
Diesel vehicles have faced greater scrutiny since VW's "dieselgate" scandal, which saw the car maker manipulate 11 million vehicles worldwide to fool regulators' emissions tests.
Diesel emissions containing nitrogen oxide can cause respiratory disease.
The lobby group said it hoped the bans would end the industry's "resistance" to refitting older, more-polluting cars to meet the latest EU standards.