It played a major role in the defense of West Germany from the Soviet Union during the Cold War.
The division was constituted on 1 October 1956 as part of the III Corps of the Bundeswehr.
As part of this arrangement, 5th Armoured Division was administratively placed under the V Corps (United States) for main defence purposes.
Meanwhile, an American division would likewise fall under control of the German II or III Corps.
German budget constraints meant that the 5th Panzer Division had to be indefinitely disbanded on 30 June 2001.