In 1955, Fairbanks Morse offered a new design for their existing H16-44 Phase I/II model locomotives. These changes involved raising the walkway & simplifying the short & long hood to make construction easier. Exterior-wise the locomotives looked much like their bigger brother the H24-66 but with 4 axles instead of 6. Under the hood the locomotives were nearly identical to the earlier phases of H16-44 except for replacing the Westinghouse Electrical System with a more reliable General Electric system.

A total of 165 of the H16-44 Phase III Locomotives were built between 1955 and 1963. Locomotives for the Canadian Pacific Railway & Canadian National Railway were built by Fairbanks Morse subsidiary Canadian Locomotive Company. A total of 58 H16-44s of were built at this plant. The last H16-44 was built for the Ferrorcarril de Chihuahua al Pacifico Railroad in 1963. This was the last Fairbanks Morse Locomotive to roll off the assembly line as