The Glasflügel H-201 Standard Libelle proved immensely popular, but was not an optimal aircraft for club and rental use, due to its mid-wing and low tail which could both be damaged in off-airport landings. Also its small cockpit fits only a certain demographic percentage of soaring pilots. The company developed the 205 with the design goals of a simple, rugged aircraft that would withstand club and fixed base operator rental use. The resulting aircraft has a high-wing and a T-tail to provide more obstacle clearance as well as a larger cockpit. To eliminate gear-up landings the monowheel landing gear is non-retractable.
The aircraft is constructed from fibreglass. New wings were designed for the 205 that use a double-taper planform and incorporate combination spoilers and flaps that occupy two thirds of the wing's trailing edge. The 15.0 m (49.2 ft) span wing employs a Wortmann FX 66-17A II 182 airfoil, the same as is used on the Standard Libelle and the Glasflügel 206 Hornet.
The Club Libelle was type certified in Germany as well as in the United States. The US certification was granted on 8 September 1975 and includes aerobatic approval for spins, loops, hammerhead turns and lazy eights. Due to its fibreglass construction, the aircraft's certification contains the restriction: "All external portions of the glider exposed to sunlight must be painted white. Registration and competition numbers must be painted blue-gray or in any other light color."