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UPDATE 1-U.S. regulators approve 2017 Fiat Chrysler diesel vehicles for sale

(Adds Fiat Chrysler CEO quote, EPA comment)

WASHINGTON, July 28 (Reuters) - Fiat Chrysler Automobiles won approval from U.S. and California regulators on Friday to sell 2017 diesel vehicles after it came under scrutiny for alleged excess emissions in older diesel vehicles.

Fiat Chrysler hopes to use updated emissions software in the 2017 vehicles as the basis of a fix to address agencies' concerns over 2014-2016 Fiat Chrysler diesel vehicles after the Justice Department sued the automaker in May, alleging excess emissions.

Regulators contended the older vehicles had undisclosed emissions controls that allowed vehicles to emit excess pollution in normal driving.

Reuters on Thursday reported the planned approvals by the U.S. Environmental Protection Agency and California Air Resources Board.

In May, the Justice Department sued Fiat Chrysler, accusing it of illegally using software to bypass emission controls in 104,000 diesel Jeep Grand Cherokees and Dodge Ram 1500 trucks sold since 2014.

Fiat Chrysler chief executive Sergio Marchionne said in a statement announcing the approvals on Friday that the company was eager to update the emissions control software in its earlier model-year vehicles. The company had been seeking permission for months to begin selling 2017 diesel vehicles.

Fiat Chrysler had begun assembling diesel trucks this month in anticipation of approval. The software update will have no effect on the fuel economy ratings or vehicle performance, the automaker said.

The company has denied any wrongdoing, saying there was never an attempt to create software to cheat emissions rules.

The EPA said on Friday that it had subjected these and many other vehicles to additional scrutiny with tests to prevent the use of illegal devices.

The EPA and California first accused Fiat Chrysler in January of using undisclosed software to allow excess diesel emissions in 104,000 U.S. 2014-2016 Jeep Grand Cherokees and Dodge Ram 1500 trucks.

Reuters reported on Thursday that it could take weeks or months for regulators to sign off on testing and then approving Fiat Chrysler's plan to use the software in 2017 diesels to update older vehicles.

The January notice of violation was the result of a probe that arose out of regulators' investigation of rival Volkswagen AG's excess emissions.

Regulators are also investigating emissions in Daimler AG Mercedes-Benz diesel vehicles, but have yet to take any action. The German automaker withdrew its request for approval to sell 2017 U.S. Mercedes-Benz diesels in May. (Reporting by David Shepardson; Editing by Bernadette Baum and Howard Goller)