These small and agile submarines were built during the Cold War to operate in the shallow Baltic Sea and attack Warsaw Pact shipping in the event of military confrontation.

The pressure hulls were built out of non-magnetic steel to counter the threat of magnetic naval mines and make detection with MAD sensors more difficult.

The early boats, however, suffered from cracking due to stress corrosion and an urgent programme was initiated to develop a new steel which overcame these problems, which received much publicity at the time.

The new high-strength, non-magnetic, austenitic steel has greater elasticity and good dynamic strength, and has proved very satisfactory in service, thoroughly overcoming the doubts that were raised by those early problems, although it has never been selected by IKL's many export customers and thus remains unique to German Navy submarines.

Subsequently, the Type 206 was designed by Ingenieur Kontor Lübeck (IKL) in 1964–65 and a production order was placed on 7 June 1969 for eight from HDW in Kiel and ten from Nordseewerke in Emden.

The work started in mid-1987 and completed in February 1992, being carried out by Nordseewerke, Emden; this upgrade includes: The STN Atlas DBQS-21D sonar has been fitted, together with new periscopes, and a new weapon control system (LEWA).