In August 1949, the US Army and the US Air Force announced a competitive procurement—the Army Observation Aircraft - for an all-metal, two-place, high-wing observation aircraft to replace the fabric-covered Piper L-4s and Stinson L-5s that had served admirably during and after World War II. The new aircraft needed to be ski- and float-capable and was to serve as a platform for ground observation, aerial search and rescue, visual and photographic reconnaissance, Forward Air Control (FAC) of fighter-bomber aircraft, cargo and personnel transport, control and adjustment of artillery fire, and pilot training. In addition, the aircraft had to be rugged, able to operate from unimproved forward airstrips, and be easy to maintain in the field. The official specification was released on 15 November 1949 and included a requirement for landing over a 50-foot obstacle in a total distance of less than 600 feet. A fly-off between competing contractors (Piper, Taylorcraft, Temco, and Cessna) was scheduled for March of 1950.

With several civilian projects underway and an engineering staff of only 18, Cessna's engineers decided to capitalize on existing designs to meet the planned fly-off date. They chose the basic wing design of the C-170 and the tail assembly of the C-195 (which the military had already purchased as the LC-126), and devoted their design efforts to creating the fuselage, landing gear, and powerplant installation. The landing-distance-over-an-obstacle requirement necessitated high-drag, high-lift flaps (unlike the plain or split flaps on other Cessnas of the day), manually operated to save weight. The solution was to modify the C-170's 45-degree slotted flap design to allow for 60 degrees of extension, using an external hinge bracket with a pivot point below the wing (a configuration later seen on civilian Cessnas).

The six-cylinder 190-horsepower Continental O-470-11, with a 213-horsepower takeoff power rating, was selected, after modification by Continental to meet the Army design and performance requirements. A 90-inch McCauley two-blade, fixed-pitch, metal propeller with a very low pitch was installed. This allowed a high engine speed for short takeoffs and landings but reduced available power at cruise to avoid overspeeding the rated RPM. The carburetor delivered more fuel, under pressure, than the engine required and a fuel return line had to be installed. A unique fuel valve design was created that ensured adequate flow while returning excess fuel to the currently selected tank (a design subsequently used on other Cessnas).

The fuselage design was laid out on full-scale Mylar stretched out on six bolted-together drafting tables. The Cessna Experimental Department built the first fuselage from laminated aluminum templates created from the original full-scale Mylar prints. Prototype construction began on 8 September 1949. The initial Model 305 rolled out of its Wichita womb a mere 90 days later.

The 1,400-pound aircraft (200 pounds over the specification weight) sported a semi-monocoque aluminum fuselage with the bulkheads and stringers made of aluminum alloy. The semi-cantilever wings, like those of the C-170 from which they had been borrowed, had dual spars, stressed aluminum skin, and single struts. The cockpit provided tandem seating for a pilot and observer in a fishbowl of plexiglass -- windows all around plus six panels in the cabin roof. Flight controls were provided for both the pilot and the observer, although the observer's control stick…