Admiral Karl Dönitz added two requirements: as the boat would have to operate in the Mediterranean and the Black Sea, it had to be able to be transported by rail, and it had to use the standard 53.3 cm (21 in) torpedo tubes.

To reduce development time, Hellmuth Walter designed the new submarine based on the previous Type XXII prototype.

By 30 June 1943 the design was ready and construction began in parallel at several shipyards in Germany, France, Italy and Ukraine.

It had a fully streamlined outer casing and apart from the relatively small conning tower and a fairing which housed the diesel exhaust silencer, it had an uncluttered upper deck.

[3] In order to allow the boat to be transported by rail, the hull sections had to be limited in size to fit the standard loading gauge.

[4] The Type XXIII proved to have excellent handling characteristics, and was highly maneuverable both on the surface and underwater.

Twenty-nine further boats (U-2372 to U-2400) were ordered from Deutsche Werft's wartime occupied yards at Toulon, but the first nine of these were scrapped incomplete on the stocks and the remainder never commenced.

U-2336, under the command of Kapitänleutnant Emil Klusmeier, sank the last Allied ships lost in the European war on 7 May 1945, when she torpedoed the freighters Sneland I and Avondale Park off the Isle of May inside the Firth of Forth.

One Type XXIII was allocated to the Soviet Union under the terms of the Potsdam Agreement, and a second unit was reportedly salvaged in 1948.

[2] In 1956, the Bundesmarine raised two Type XXIII boats, U-2365 (scuttled in the Kattegat in 1945) and U-2367 (which sank near Schleimünde [de] following a collision with another U-boat), and recommissioned them as U-Hai (Shark) and U-Hecht (Pike), with pennant numbers S 170 and S 171 respectively.

Although a total of 980 Type XXIII submarines were planned, many were scrapped incomplete (or indeed never ordered in many cases), only the following 61 vessels were built: