Originally designed to replace the Douglas DC-3/C-47 Skytrain, the prototype utility transport aircraft was designed by Max Holste and designated the Max Holste MH.250 Super Broussard it first flew on 20 May 1959. The initial design had the aircraft rather square in shape, and fitted Pratt & Whitney Waspradial engines to the aircraft. The second prototype, known as the MH.260, was equipped with 980 hp TurbomecaBastan turboprop engines and eventually took its flight just over a year later on 29 July 1960.
Eventually, wholly state-owned Nord Aviation (later renamed Aérospatiale) took over the further development of the aircraft. The new changes that Nord brought to the aircraft were a rounded, pressurized cabin and the new name Nord 262. The new cabin design enabled the aircraft to carry between 24-26 passengers.
The first prototype since the changes by Nord took to the skies for the first time on 24 December 1962 and the aircraft was exhibited at the June 1963 Paris Air Show. The aircraft received its certificate on 16 July 1964 and entered its initial commercial service with Air Inter of France.
Four of the first aircraft 262A, 262B, 262C, and 262D were built, the first two fitted with Bastan IVC engines, while the C and D models were fitted with the higher powered Bastan VIIC. Of these four aircraft, the latter two saw their first air time in July 1968. Most sales of the initial aircraft were not in the passenger field, but rather the military field. The 262D was the most popular and marketed as Frégate.
As for the American designation, the "Mohawk 298" airplanes were modified Nord 262s and first flew on 7 January 1975, equipped with Pratt & Whitney Canada PT6A-45 turboprops. Built in order to meet United States FAR 298 regulation, the modification of the aircraft was overseen by Mohawk Air Services and outsourced to Frakes Aviation. Allegheny Airlines was the initial operator of the aircraft.
Joel Krane, the chairman of the FOEB (Flight Operations Evaluation Board) determined that a common type rating could be issued for the Nord 262 and Mohawk 298. Appropriate differences training would be required for transitioning pilots.