VW will be fined 17.8 billion Korean won ($16 million), in addition to a 14 billion won fine from 2015, the ministry of environment said.
The German automaker admitted last year that it had falsified emissions data in its diesel vehicles.
VW has since suffered a global setback in sales and reputation.
The sales ban in South Korea affects 32 types of cars – including the VW Golf and Jetta – but a total of 80 models, which include different size engines or trimmings of each type of car.
The ban, which affect VW, Audi and Bentley models, come as the result of an extensive probe into the company which saw the automaker’s offices in South Korea raided by investigators.
South Korea’s environment ministry also revoked certification for an additional 83,000 cars, bringing the total number of cars de-certified to more than 200,000.
That is about 68% of the 300,000 cars sold by VW in Korea since 2007, Yonhap news agency said.
South Korea is an important market for VW, especially for the company’s luxury brands Bentley and Audi, and the company had more than tripled its sales before it was hit by a slump in the wake of the emissions scandal.
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