The government said it will test up to 5,000 VW Jetta and Golf cars, along with Audi A3s made in 2014 and 2015.
The probe will be expanded to all German diesel cars if issues are found.
VW shares plunged nearly 20% on Monday after US regulators found that some VW cars could manipulate emissions tests.
The Environmental Protection Agency (EPA) found that software in several diesel cars could deceive regulators.
Volkswagen was ordered to recall half a million cars in the US on Friday.
In addition to paying for the recall, VW faces fines that could add up to billions of dollars. There may also be criminal charges for VW executives.
The White House in Washington also reportedly said it was "quite concerned" about VW's conduct.
Chief apologises
Volkswagen chief executive Martin Winterkorn apologised after the scandal emerged and said he would "support" the German transport ministry's investigation into the carmaker.
"I personally am deeply sorry that we have broken the trust of our customers and the public," Mr. Winterkorn said.
He has launched an investigation into the software that allowed VW cars to emit less during tests than they would while driving normally.
The EPA found the "defeat device" in diesel cars including the Audi A3 and the VW Jetta, Beetle, Golf and Passat models.
VW has stopped selling the relevant diesel models in the US, where diesel cars account for about a quarter of sales.
The EPA said that the fine for each vehicle that did not comply with federal clean air rules would be up to $37,500 (£24,000). With 482,000 cars sold since 2008 involved in the allegations, it means the fines could reach $18bn.
That would be a considerable amount, even for the company that recently overtook Toyota to be the world's top-selling vehicle maker in the first six months of the year. Its stock market value is about €66bn ($75bn; £48bn).
-BBC