In preparation for the opening of the standard gauge line between Melbourne and Albury, the Victorian Railways had purchased a further eight S class locomotives, with the last of these entering service in 1961.

[1] Standard gauge trains at the time were typically rostered for a single S class locomotive, which could deliver approximately 1,800 hp.

Clyde's proposal was viewed most favourably by the VR, as they offered the fastest delivery timeframe and a lower total cost of ownership by designing the new units to share many components not only with the S class but also (though to a lesser extent) the B class,[1] both of which had also been designed and built by Clyde.

After the tender had been won, three revisions were made (the major changes being the placement of the battery box) before the final design was approved as general arrangement drawing 2409983C.

[1] Driving with the Number 2 (short) end leading would technically be possible, though strongly discouraged as the driver would be sitting on the opposite side of the cabin to that expected by the positioning of trackside signals and signage while also having his back to the brake controls and speedometer.

The first batch of six were built in 1966 by Clyde at Granville in New South Wales with the model designation G16C and using GM EMD 16-567C engines, which would produce 1,810 hp for traction.

After assembly and initial testing, each unit ran at least one trial trip on the Main North line to Broadmeadow, near Newcastle, before being marshalled into freight trains for delivery to and hand-over at Albury.

Locomotive X31, however, was continually affected by a manufacturing issue with its pneumatically-operated Automatic Staff Exchanging equipment (which was of a new design) and so was excluded from the conversion rotation until the problem was finally resolved in the mid-1980s at Newport Workshops - though by this time the use of automatic-exchange equipment in Victoria was rapidly declining.

However, it was rare for them to venture out to Gippsland until the late 1970s, and the Bendigo line was near-exclusively run with B class locomotives for sake of operational simplicity.

Shortly before the contract closed, two of the S class fleet were destroyed in the Violet Town rail accident.

Paperwork shows X37 and X38 as rebuilds, but this was only for accounting purposes and no recycled components were included in those or other engines when first delivered.

The reasoning for the order was that, as well as traffic increases (now up to 13.5 million train miles per year), the earlier diesel-electric locomotives were coming due for major overhauls, with no spare motive power to fill the gaps in the rosters (with all steam long-since gone).

The new cab design allowed only for short-end-leading operation on the mainline, and to improve visibility the short-end nose was cut down to an angled profile similar to the last orders of the T class locomotive.

During the following decade, air-conditioning units for the driver cabins were added to some engines, above the long-end nose and next to the cab end.

In August 1994, X35 was withdrawn following a major engine failure, and stored at South Dynon Locomotive Depot.

[11] X35 was purchased by the Seymour Railway Heritage Centre in 1998 for preservation, but transferred back to Freight Australia a few years later, for rebuilding as XR551.

All but two of the X fleet passed to Pacific National with the business in August 2004, these going to CRT Group and in May 2018, X53 was scrapped and X54 only to New South Wales.

X31 was finally withdrawn from revenue services in 2009, and per the agreement laid out earlier, in January 2010, X31 was transferred to the Seymour Railway Heritage Centre.