The Deutsche Werke shipyard in Kiel was awarded the contract for Pancerschiff "E" (Ersatz Hessen) on January 25, 1934. Her keel laying took place on February 14, 1934. The construction was halted on July 5, 1934 and she was taken away from the boat ramp. Practically, they removed the fragments of the hull that had already been built. Nonetheless, the contract was not canceled so the shipyard would continue the works after the renewed project had been approved.The keel was officially laid again on July 6, 1935. They launched the hull on December 8, 1936 and the christening speech was made by colonel general Freiherr von Fritsch. The widow of Julius Markerz, who had commanded the armored cruiser Gneisenau, became her godmother. A minor accident happened during the ceremonial launching: the hull was impossible to stop due to the faulty mechanisms so it hit the opposite Hindenburg Wharf. Fortunately, the hull itself was not damaged. Works on its further equipment went off without a hitch and the ship was ceremoniously commissioned into the Kriegsmarine on May 21, 1938. The command of the ship was taken by F. Forster, who had previously been the CO of the light cruiser Karlsruhe. A big part of the initial crew of Gneisenau actually came from there. The second-in-command on Gneisenau, lieutenant commander Schonemark, had led the team of specialists in charge of the warship's construction and equipment. As the unit entered service, her crew included 1,700 seafarers.