The court ruled to uphold the decisions of the courts of the first instance in the German cities of Stuttgart and Duesseldorf, the most polluted German cities, which had authorized the bans on heavily polluting diesel cars, according to a ruling issued on the German Federal Administrative court's website.
Chancellor Angela Merkel stated that she hoped that measures to reduce air pollution in German cities would have an effect soon.
Berlin's Chamber of Commerce announced that a ban on diesel cars in the city's downtown could cost firms in the German capital 240 million euros ($295 million) alone to replace their parks.
German car manufacturers agreed in August at the so-called diesel summit to update the software for 5 million diesel cars in an attempt to reduce harmful emissions.
Angela Merkel announced plans of the German government in August to allocate one billion euros ($1.188 billion) to municipalities in order to implement measures aimed at combating air pollution. She repeatedly stated that the driving bans for diesel cars should be avoided.