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The LVG B.III was a dedicated trainer based on the earlier B.I and B.II unarmed biplane reconnaissance aircraft. The B.I had been one of the most important German reconnaissance aircraft of 1914, and the B.II had been a major front-line type in 1915, but both had been withdrawn from front line service in 1916. They had then gone on to be used as training aircraft, where their simple sturdy construction was a great asset.
The original B.I/ B.II was built around a wooden framework with four longerons in the fuselage, with two-bay unequal span wings, all fabric covered.
By 1917 the supply of B.Is and B.IIs must have been running short, for production was resumed with the LVG B.III. The B.III was very similar to the B.II, but with a more modern tail - the earlier aircraft had triangular low-aspect horizontal and vertical tail surfaces. This was replaced with a more rounded tail with larger control surfaces on the B.III. The aircraft was also strengthened, with the use of plywood covering for the rear part of the fuselage. The B.III was built by Schütte-Lanz and Euler, both firms that had produced the earlier aircraft.