Ed Swearingen, a Texas fixed-base operator, started the developments that led to the Metro through gradual modifications to the Beechcraft Twin Bonanza and Queen Air business aircraft, which he dubbed Excalibur.

A new fuselage (but with a similar nose) and vertical fin were then developed, married to salvaged and rebuilt (wet) Queen Air wings and horizontal tails, and Twin Bonanza landing gear; this became the SA26 Merlin, more or less a pressurized Excalibur.

An all-new aircraft was built and named the SA226-T Merlin III with a new nose, wings, landing gear, cruciform horizontal tail[note 1] and inverted inlet Garrett engines.

Because FAA regulations limited an airliner to no more than 19 seats if no flight attendant was to be carried, the aircraft was optimized for that number of passengers.

A version with strengthened floors and the high gross weight option was offered as a cargo aircraft known as the Expediter.

A Metro 23 EF with an external pod under the lower fuselage for greater baggage capacity was also offered as well as an Expediter 23 and Merlin 23.

The two engines were to be Garrett TFE731 turbofans then in development;[10] they were originally to be mounted on the aft fuselage, however during the course of design work their location was moved to under the high-mounted wing.

One version that did see the light of day was the Metro 25, which featured an increased passenger capacity of 25 at the expense of the baggage space found in earlier models; the deletion of the left rear cargo door, the addition of a passenger door on the right-hand rear fuselage, and a belly pod for baggage.

[19] In service with Perimeter Aviation in Canada, this long-term operator of the Metro II and III made a number of modifications to suit its use in northern and remote Canadian sites where rudimentary gravel "strips" were common.

Some of the many innovative changes to the design of the Metro allowed the aircraft to fly more efficiently, as well as cutting down on the "noise factor" that was attributed to the early models.

Their Metros are also all equipped with modern avionics suites, including the recent installation of Garmin 950 glass cockpits and GPS satellite tracking.

Many of the improvements resulting in the Metro 23 came about during work to produce the military C-26B model for the United States Air Force.

Since the first example (a Merlin IVA) arrived in 1975, almost 20% of the fleet has operated there, and, as of December 2008, 61 Metros and Expediters are registered in Australia, more than all of its market rivals combined.

In 2001, the last aircraft, Metro 23 c/n DC-904B, was finally delivered to National Jet Aviation Services of Zelienople, Pennsylvania, an air charter operator.