Martin Winterkorn may be terminated as the CEO of Volkswagen this week following the emissions test scandal. 

The company's board will make a decision on Winterkorn's removal from the top post on Friday, The Tagesspiegel newspaper stated citing unidentified people on Volkswagen's supervisory board.

Winterkorn will be replaced by Matthias Mueller, the head of the auto maker's Porsche sports car business, according to the source.

"In the first instance, he must step down immediately. In the second, one needs to ask why such a far-reaching violation was not reported to the top and then things will get tough too," said Evercore ISI analyst Arndt Ellinghorst.

While a Volkswagen spokesman denied the speculations, Winterkorn apologized for the wrong doing in a video. However, he refrained from revealing his future plans in the video, which has been posted on the company's website.

Further, a "key Winterkorn ally" has withdrawn public support for the chief executive.

"I don't want to preempt the upcoming intense deliberations and will not comment on details or any consequences," said Stephan Weil, head of the German state of Lower Saxony.

Weil, a supervisory board member representing Volkswagen's second-largest shareholder, recently supported the extension of Winterkorn's contract as CEO, Livemint reported.

Stocks prices of Volkwagen fell to four-year low this week after the company said that it cheated US regulators in getting emission clearances for some of its diesel models by using software.

The car maker said that it would allocate funds worth $7.3 billion in the third quarter to cover the damages resulting out of the biggest scandal in its 78-year-history.

But, the US Environmental Protection Agency (EPA) said last week that Volkswagen may need to pay penalties to the tune of $18 billion.