It began forming in the southern sector of the Eastern Front in late 1942, but was never completed due to the loss of its assets during the Soviet counteroffensives in the Battle of Stalingrad, and no further attempts were made to reconstitute the division.

[1] In autumn 1942, the two echelons joined in Voronezh, situated then in the rear area of the German 2nd Army, and the division was formally activated on 1 October 1942.

With about 3,000 men its strength was well under that required for a Panzer Division; however the situation required that it had to be scattered in several groups to support different sectors of the Eastern Front: Don, south of Kharkov, Hungarian 2nd Army, Italian 8th Army.

[2] By 1 January 1943, the unit was depleted: it had only half of its mechanised infantry and 11 tanks left.

Once the Soviet winter offensive, Operation Little Saturn, was stopped, the 27th Panzer was disbanded around 3 March 1943.