[4] By July 1991, the Canadian Armed Forces had identified the need to replace their aging fleet of 1960s and 1970s era armoured personnel carriers.

General Motors Diesel proposed an upgraded variant of their 8×8 platform incorporating the turret and weapon system of the Coyote.

[6] In 2009, a number of LAV III's were modified with a Nanuk remotely controlled weapon station (RCWS) to provide better protection and to increase the chances of survival of the crew against improvised explosive devices and anti-tank mine threats on the battlefield.

[7] The LAV III is powered by a Caterpillar 3126 diesel engine developing 350 horsepower (260 kW) and can reach speeds above 100 kilometres per hour.

[6] The vehicle is fitted with 8x8 drive and also equipped with a central tire inflation system, which allows it to adjust to different terrain, including off-road.

Higher ground pressure results in an increased likelihood of sinking into soft terrain such as mud, snow and sand, leading to the vehicle becoming stuck.

While there have been several recorded rollovers (about 16),[10] the most common cause was found to be unstable terrain, specifically road shoulders unexpectedly giving away beneath the vehicle.

[11] The weight balance of the LAV III is taken into consideration during driver training, largely mitigating the chances of a rollover.

In December 2008 the Government of Canada awarded EODC Engineering, Developing and Licensing Inc. C$81.5 million worth of contracts to provide for add-on-armour kits, modules and spares for its LAV III wheeled armoured personnel carriers.

[20] This can be explained by the fact that the LAV III is the most commonly used Canadian armoured personnel carrier in theatre, and simply represents a normal association between use and likelihood to encounter a mine or improvised explosive device.

The LAV III is equipped with an LCD monitor directly connected to the vehicle's external cameras, providing real-time images of the battlefield for the passengers.

[23] In 2011, these three LAVs were moved to Bamyan to support the provincial reconstruction team there as they were no longer needed in Kabul due to reduced SAS numbers.

In 2011, after the Christchurch earthquake, LAVs from Burnham Camp were deployed to assist police with securing the inner city at night.

In March 2016, two LAVs were deployed to assist with lifting a siege near Kawerau in the Bay of Plenty after four policemen were shot at and severely injured.

[30] In August 2019, GDLS-Canada received a four-year, $3 billion deal to build 360 armoured combat support vehicle variants.