In 1943, an improved version of the Lancaster was proposed for the war in the Pacific. The aircraft featured larger dimensions, more powerful engines, better performance, heavier armament and longer range. Originally intended to be designated the Lancaster Mk IV, the eventual design was sufficiently different to warrant a new designation and name and became known as the Avro 694 Lincoln.

Preparing for the "Tiger Force" intended for the Pacific war, as well, Canada ordered home production of the Lincoln in order to re-equip Canadian bomber squadrons destined for the Pacific theatre. At the cessation of hostilities, the production order was terminated after only six aircraft had been started. Three Lincolns, including two borrowed from the RAF, were then briefly evaluated by the RCAF in post-war tests.

In the fall of 1947, there was a special appearance by several Lincoln aircraft of the Second World War's famous 617 Dambusters Squadron at the Canadian National Exhibition (CNE), Toronto, Ontario.