In early 1937 the French Service Technique de l'Aeronautique (or Air Ministry) issued specification A20 for a four-engined heavy bomber to replace the Armée de l'Airs outdated Farman F.221 and F.221s. SNCAO's design, the CAO.700, was designed by its Saint-Nazaire design team, formerly the design team of Loire-Neuport before the nationalisation of the French aircraft industry. In order to speed design of the aircraft, it used the fuselage of the Loire-Nieuport 10 floatplane, combined with a new wing, while the engine installation was based on that of the Lioré et Olivier LeO 451, with four Gnome-Rhône 14N-49 clockwise-rotating radial engines in close-fitting Mercier cowlings and driving three-bladed Ratier propellers (as used on the starboard wing of the LeO 451).
The aircraft was of all-metal, stressed-skin construction, and had a crew of five. The pilot and co-pilot sat in tandem on the port side of an enclosed cockpit, with a bomb-aimer/navigator in the nose, a dorsal gunner operating a powered cannon-equipped turret aft of the trailing edge of the wing, and a radio operator sitting further aft. Defensive armament was a single flexibly-mounted 7.5 mm MAC 1934 machine gun in the nose, operated by the bomb-aimer/navigator, with a further two flexibly-mounted MAC 1934s firing from a ventral position operated by the radio operator and a single 20 mm Hispano-Suiza HS.404 autocannon in the dorsal turret. A 5.8m (19feet) long bomb bay could carry 3000kg (7,000lb), while auxiliary bomb bays in the wing roots could carry a further four 225kg (496lb) bombs.
In June 1940, the incomplete prototype was transferred by rail from the factory at Saint-Nazaire to Istres where the aircraft was assembled in preparation for its first flight. On 24 June the prototype was taxiing out to the runway ready to make its maiden flight when news of the Armistice with Germany reached Istres, resulting in the commander of the airfield to order the crew of the CAO.700 to stop taxiing the aircraft and abandon the planned test flight. No further attempts were made to fly the prototype.