Between August 1981 and June 1982, two German Leopard 2 (120 mm smoothbore gun) and two American M1 (105 mm rifled gun) tanks underwent technical and user trials in Switzerland.

In August 1983, Switzerland selected the Leopard 2 and late in 1984 the Swiss Parliament authorised the purchase of 380 Leopard 2s. The first 35 Leopard 2s came direct from Krauss-Maffei (which on 1st January 1999 bacame Krauss-Maffei Wegmann) in Munich, the remainder were manufactured under licence in Switzerland with Contraves as prime contractor. Final assembly took place at Swiss Ordnance Enterprise Thun (previously k+w Thun) where the production and overhaul of the Pz 61 and Pz 68 were undertaken. Swiss Ordnance Enterprise was also responsible for assembling the turrets and power units. The Rheinmetall 120 mm smoothbore gun was also built under licence.

Between 60 and 70 per cent of the Leopard 2s were built in Switzerland. Swiss Leopard 2s are similar to the German vehicles but have Swiss radios, antennas and machine guns, an improved driver's hatch, a digital computer in place of the analogue computer, a Deugra fire/explosion detection and suppression system for the crew compartment, improved NBC protection, hydraulic track tensioning units, a Baird passive night driving periscope, optical master warning for the driver when driving with the hatch open and some other minor modifications.

The first 35 Leopard 2s, or Panzer 87s as they are designated by the Swiss Army, were delivered in 1987, with the first battalion being formed in 1988. The first two Swiss-built Pz 87s were delivered to the Defence Procurement Agency (GR) on 17 December 1987, as originally scheduled. Late in 1984, Hughes Electro-Optical and Data Systems Group (which is now part of the Raytheon Group) signed a manufacturing and technical assistance agreement with Wild Heerbrugg Ltd of Switzerland, under which the latter company would build the laser tank fire-control system for the Swiss Panzer 87 Leopard, or Pz 87 Leo as it is usually known.

Production was undertaken at Swiss Ordnance Enterprise Thun at the rate of 72 vehicles a year, with final deliveries taking place in 1993.

It is expected that at least part of the Leopard 2 MBT fleet of the Swiss Army will be upgraded to the Leopard 2A5 configuration in the future.

The Swiss Army has selected the new German Rheinmetall 120 mm DM53 APFSDS-T round and an order will be placed for 20,000 rounds in 1999.

• Leopard 2 with 140 mm gun

For trials purposes, a Swiss Army Leopard 2 has been fitted with a 140 mm smoothbore gun. There are no plans for this to be retrofitted to the existing in service Leopard 2s.