In 1935 contracts were issued by the Germany Army Weapons Department for prototypes of two main battle tanks. One would have a high velocity gun for battling tanks and the other carrying a large caliber gun to support it by firing HE ammunition. Guderian intended for this model to be the primary tank of the Panzer divisions. The medium tank was to be 15,000 kg, but this was later modified to 24,000 kg, which was the limit for the Heer's (Army) bridging equipment.
The Mechanized Troops Inspectorate wanted a 50 mm main gun but Waffenamt (Ordnance Department) felt that the standard 37 mm infantry gun was sufficient and would ease supply as it was also the standard size of the infantries anti-tank weapon. A large turret ring was kept so that the tank could later have a larger gun installed. By 1938 the Ordnance Department decided to ask Krupp to develop a turret to install the 50 mm into.
To conceal the development of the vehicle it was called the Zugführerwage (ZW, platoon commander's vehicle).
On September 27, 1939, PzKpfw III was accepted as a standard issue after its success in Poland.
The hull was divided into 4 prefabricated welded assemblies: hull, front & rear superstructure, and turret. The hull had three sub-assemblies: main hull, front superstructure carrying the turret, rear superstructure with the engine. These sections were welded, and then all the sections were bolted together. A bulkhead divided the hull section, with the front having the gearbox and steering.
The turret, which was welded, didn't have a rotating platform, instead it had seats suspended from the turret. There were large hinged doors, that had pistol ports and vision slits, on the turret sides.
The turret also mounted two coaxial 7.92 mm machine guns in models PzKpfw III Ausf A through PzKpfw III Ausf E and one machine gun for the rest.
At the rear of the turret were two pistol ports.
The commander had cupola that allowed all round view and could communicate via throat microphone. He had a central raised seat between the gunner and loader. The driver, radio operator, and commander were connected to the external radio.
The driver of the PzKpfw III sat on the left in the front of the hull and the radio operator / machine gunner sat to the right. In the front superstructure the driver looked out through a vision block. Through visor blocks that were behind armored flaps the driver and machine gunner could look out through the sides.
Escape doors were mounted centrally on both sides of the hull, which was later eliminated in the last two models. The main hull also had doors that gave access to the brake mechanism and allowed for escape of the crew.