The Sentinel AC III was a version of the Australian Sentinel AC I cruiser tank, modified to carry a 25pdr howitzer.
The AC I was an impressive technical achievement, but by the time it entered production in 1942 its 2-pounder gun was obsolete, at least against German armour. The basic design was sound, and it was impressively easy to up-gun it, especially when compared to its British and American contemporaries.
The AC III was the first attempt to produce a more powerful version of the tank. The 2-pounder was replaced with a 25-pounder howitzer, to produce a close support tank. This required a new turret and a larger turret ring (up from 54in to 64in). The cast hull was perfectly capable of dealing with the extra recoil produced by the larger gun.
The AC III used a Perrier-Cadillac triple engine, which used the same combination of three Cadillac engines in a clover leaf configuration as on the AC I, but with a common crankcase. The new engine provided 397hp, up from 351hp. This also saved space and allowed extra fuel tanks to be installed. More space was saved by removing the hull machine gun and the associated crew member.
The prototype of the AC III was tested in February 1943, and was accepted for production. The original plan was for it to replace the AC I on the production lines at Chullona, starting in May 1943, but in June all Sentinel production was cancelled, probably before any AC IIIs were completed.