The success of the Type 2 Ka-Mi design pleased the planners in the Imperial Japanese Navy General Staff, and it was determined that a larger version with stronger armor and armament would be useful in future amphibious warfare operations as well as special forces missions. Type 3 Ka-Chi was developed in 1943, and the first units entered service in late 1943-1944.
However, only 19 Type 3 Ka-Chi's were built from 1943 to 1945. The main priorities of the Navy were in warship and aircraft production, and lacking in any definite plans for additional amphibious operations, production of the Type 3 Ka-Chi remained a very low priority.
The Type 3 Ka-Chi was based a heavily modified version of the chassis of the Army's Type 1 Chi-He medium tank, and thus featured considerably better armored protection and firepower than the earlier Type 2 Ka-Mi. It had smooth sides that faired into front and rear flotation pontoons. The front pontoon had a curved 'bow' shape and both pontoons could be jettisoned from inside the tank once the tank had landed. However, in practice, the pontoons were usually retained, as they provided some marginal additional protection against enemy fire.
The main gun of Type 3 Ka-Chi was the Type 1 47 mm gun with barrel length of 2.250 meters (L/48), EL angle of fire by -15 to +20 degrees, AZ angle of fire of 20 degrees, muzzle velocity by 810 m/s and penetration of 55 mm/100 m, 30 mm/1,000 m. This was also the same 47 mm gun used on the Army's Type 97-kai Shinhoto. Secondary armament was a coaxial Type 97 light machine gun and a hull mounted weapon of the same type. The gun turret was designed with an extended circular cupola to keep the hatch above water. The Type 3 Ka-Chi also had a distinctive large snorkel behind the turret for aerating the diesel engine more efficiently and keeping the exhaust free of water.
The vehicle required a crew of seven, one of whom (as with the Type 2 Ka-Mi) served as on-board mechanic.