It was formed in central Germany area at the beginning of April 1945 under the command of Generalleutnant Martin Unrein, from the 233rd Panzergrenadier Division and also drawing Panzergrenadier troops from the 233rd Reserve Panzer Division and vehicles from the Panzer training school at Putlos.

The general quality of the men was high, as most of the infantry were front-line veterans who had been posted to reserve divisions after recovering from injuries, and the tank crews were mostly composed of instructors from the officer training schools.

Individual units were equipped with a variety of vehicles, making maintenance difficult, and ammunition was in short supply.

It first saw action in the Northern part of the Eastern front, attempting a local counterattack against the Soviets in Pomerania.

The XXXIX Corps was ordered to push south to cut the supply lines of the leading American divisions, which had now reached as far as the Elbe river, and attempt to link up with the 11th SS Panzer Army, which was fighting in the Harz mountains.