In 1986 the commander of the Argentine Air Force made a visit to Embraer and suggested cooperation between the two countries in the development of an aircraft. At the time, Embraer had carried out market research on the design of an aircraft for regional flights to replace the Bandeirante. The project in question was a turbo-propeller that would perform like a jet. In January 1986, Presidents José Sarney, of Brazil, and Raúl Alfonsín, of Argentina, signed the agreement between Embraer and the Military Aircraft Factory (FMA) to build the aircraft.

Market research gave rise to the EMB-123 program, a twin-engine turboprop pressurized for 19 passengers, developed by taking the Brasilia platform as a basis, with very attractive aesthetics, high safety standards and the most modern aviation technology of the time.

Due to the similar features between the EMB-123 and other Embraer aircraft, the Company created the “family” concept, which would make possible a decrease in operating costs, beginning with the EMB-120 Brasilia and continuing with the EMB-123.

In May 1987, at the signing of the agreement with FAMA (Argentine Factory of Aerospace Material, the new name of FMA), the aircraft was rechristened CBA-123 (Brazil-Argentina Cooperation 123). The airplane was initially nicknamed "Paraná" by Argentina and "Tapajós" by Brazil, but since the airplane’s main target was the international market, it was decided that its name should be easier to pronounce. So, there was an international competition, which received more than 6,000 suggestions, and the name chosen was Vector.

On July 18, 1990, the CBA-123 made its first flight. The official introduction took place on the 30th of that month, in São José dos Campos, and the event was attended by Presidents Fernando Collor de Mello, of Brazil, and Carlos Menem, of Argentina. In September 1990, the aircraft was introduced at the Farnborough International Airshow, in England.

In 1991 the program was interrupted for several reasons. The sophistication and modernity of the aircraft demanded more investment, but Embraer was facing a period of crisis. FAMA was also in financial difficulties because it was not allocated a budget of its own (as it was a department in the Argentine Air Force), which hindered the transfer of funds to the project. The aircraft had virtually no competitors in the world in terms of speed, safety, comfort, silence and appearance, but its high costs had made it somewhat noncompetitive. Moreover, the regional aircraft market had started favoring higher passenger capacity.

In 1992, the CBA-123 project was deactivated. Embraer and FAMA’s initial contract specified the purchase of 60 airplanes in total, but only two prototypes were produced.