Governor Andrew M. Cuomo says the strategically leveraged investment will help deploy at least $300 million (£231.8m) of clean vehicles and infrastructure on the state’s roads.
It plans to use more than 60% of the funding to help reduce the cost of electric buses and trucks and provide funding for more EV charging infrastructure.
New York State aims to replace or repower older, polluting diesel trucks, school buses and other equipment with cleaner alternatives.
It suggests nitrogen oxide reductions achieved by the plan will exceed the emissions produced by the faulty Volkswagen vehicles and will be equivalent to removing 65,000 automobiles from the road.
Governor Andrew M. Cuomo said: “As Washington continues to roll back protections, New York is more committed than ever to supporting cleaner, greener transportation technologies.
“By strategically investing these settlement funds, we can take real action to improve community health and sustainability, while providing incentives to address one of the largest causes of harmful pollution and greenhouse gas emissions.”