On most 940s, this button serves to disengage overdrive. However, it
was an option (if you ordered through European Delivery, as I did) to
have the air suspension, the engine gearing, the brake response, and
the turbocharger reconfigured into a sort of sport mode through this
button, sort of like the S button found on many newer models. This is
what I did -- we essentially use the same button, but different
functions. To find out which you have, simply start the car, get out,
and push the button while carefully noticing the clearance of the car.
If it seems to drop, you have the second option. If there is no
noticable change, you have the first.

This button can be quite sensitive. I learned very quickly not to rest
my hand on the shifter -- it seems to just feel the touch and activate.
Replacements, I have found, are exactly the same.