The design was based on two similar Gothenburg tram models, and a prototype built by the Melbourne & Metropolitan Tramways Board.

The MMTB approved of the design, and in 1972 requested a prototype be constructed, the result was PCC 1041 being built at Preston Workshops.

[5]: 195–196  Prototype PCC 1041 became the basis of the Z-class trams, influenced by the M28 design running in Gothenburg, Sweden.

[9] In 1972 Rupert Hamer became Premier of Victoria, promising new trams, which had been highlighted as needed in the 1969 Melbourne Transportation Plan.

[5]: 196–197 Tenders for 100 trams based on prototype PCC 1041's design were called for in 1972 with Comeng awarded a contract in 1973.

[16] The plans purchased by Comeng proved to be less useful than anticipated, due to them being metric, single ended (with doors only on one side), and to some extent 'over-designed'.

[5]: 197–198 [17][18] There were a number of design changes made which differentiated the Z-class from PCC 1041, including the destination display arrangement.

[5]: 198  Internally they, like PCC 1041, had conductors consoles that passengers would have to queue for, and only two doors per side, these two features hampered loading and proved unpopular.

[5]: 196  Fitting the ASEA M28 equipment into the Z-class body, which was heavily based on the M29, posed a problem due to the extra doors, tapered ends, and second cab Comeng had added to make them able to operate in Melbourne, this necessitated lengthening the design to accommodate the equipment.

[5]: 203  Major construction was carried out at Dandenong, with bogie frames fabricated at Granville, and final fit out and commissioning occurring at the MMTB's Preston Workshops.

[20][21] Soon after commissioning it became apparent that the Z-class had ride problems due to stiff suspension, and track differences between Gothenburg and Melbourne.

Renumbered W-11 in recognition of buses operated in Karachi, Pakistan famous for their entertainment value, it was decorated with lush designs and played Bhangra and Pakistani music.

[22]: 31–36 [28] They are fitted with AEG control equipment and Duewag bogies, have an additional door each side (for a total of three rather than two for the Z1 and Z2), drop down (as opposed to top sliding) Beclawat windows and improved headlights.

The Z3-class build process went smoothly, with few problems, bar a slow delivery of equipment from AEG, and a few minor faults that required remedying after construction.

[31] On 26 October 2011, Z3 158, specially liveried as a Royal Tram was used to convey Queen Elizabeth II and Prince Philip along St Kilda Road from Federation Square to Government House during their visit to Melbourne.

They received new seats, painted interior walls, glass replacement with scratch proof film applied, and the Public Transport Victoria livery at Preston Workshops.