The Varsity was developed by Vickers and based on the Viking and Valetta to meet Air Ministry Specification T.13/48 for a twin-engined training aircraft to replace the Wellington T10 and the Valetta T3 and T4. The main differences were the wider-span wings, longer fuselage and tricycle undercarriage; and a ventral pannier to allow a trainee bomb aimer to be in a prone position and a bomb bay with a capacity for 24 x 25lb smoke & flash bombs. The prototype Type 668 first flew from Wisley on 17 July 1949.
A civil version the VC.3 was planned but with the success of the VC.2 Viscount the idea was abandoned.
The Varsity was introduced to replace the Wellington T10 trainer, following deliveries to trials units the first production aircraft were delivered for operational use in 1951 to No. 201 Advanced Flying School at RAF Swinderby, where it was used to train pilots in flying multiple-engined aircraft. It also equipped two Air Navigator Schools, in 1952, and the Bomber Command Bombing school, with the job of training crews for RAF Bomber-Commands V-bomber crews.