As many as half a million Australian car owners could be represented in the lawsuit - lodged in Victoria's Supreme Court by Maddens Lawyers on Monday - which its lead lawyer warned could reach "new heights" for penalties.
Popular vehicles targeted in the lawsuit range from four-wheel drives to utes and vans including the Toyota Hi-Lux, LandCruiser, RAV4, Prado, Fortuner, Granvia and HiAce.
Toyota vehicles purchased since February 2016, whether new or second-hand, will be included in the lawsuit.
Maddens Lawyers special counsel Brendan Pendergast said the class-action lawsuit would allege that through "sophisticated engineering" and the use of "multiple sensors", these Toyota vehicles would comply with emission standards during testing conditions but not in real-world use.
"We allege that not through accident but through deliberate engineering intervention, these vehicles are fitted with what are generically called defeat devices," he said.
"When the vehicle comes under load or achieves speeds commonly required in the usual purchaser of a vehicle, the vehicle no longer complies with the emission standards."
Mr Pendergast claimed the vehicles' true emissions would appear only when the vehicle was driven at higher speeds, outside tests or under load.
He said the use of defeat device technology was "misleading" and "deceptive" and claimed it may have convinced buyers to invest in Toyota vehicles under false pretences.
"Many Toyota owners would be shocked, disappointed," Mr Pendergast said.
Maddens Lawyers, whose court case is being funded by a British legal firm, is calling on Toyota vehicle owners to join its class action online.
Toyota Australia is preparing a response to the lawsuit.
Greenpeace Australia Pacific senior campaigner Lindsay Soutar said claims made in the case would be "incredibly disappointing" for Australian motorists.
"If the allegations are made out, the case is another alarm bell to Toyota that it needs to clean up its act and get in the fast lane with electric vehicles," Ms Soutar said.
The class-action lawsuit is the latest in a series of court cases against vehicle manufacturers over defeat devices, or hardware, software and designs that change the way vehicles operate during emission testing to evade standards.
Another two Australian law firms are pursuing class-action lawsuits against Toyota subsidiary Hino for fuel emissions from its trucks.
The company said in a statement in March it had "identified misconduct" related to its compliance with emission regulations.
In December 2019, Australia's Federal Court ordered Volkswagen to pay $125 million for masking emissions from its diesel vehicles - the second largest penalty issued for a breach of Australian Consumer Law.
