In 1986, during a visit to Embraer in Brazil, the commander of the Argentine Air Force proposed cooperation between the two countries to develop a new turboprop with jet-like performance. At the time, Embraer was already planning to create a regional aircraft to replace the Bandeirante. Shortly after the visit, in January 1986, Presidents José Sarney of Brazil and Raúl Alfonsín of Argentina signed an agreement for the construction of the new aircraft, to be manufactured by Embraer and the Fábrica Militar de Aviones (FMA).

The result of this cooperation was the EMB 123, a pressurized twin-engine turboprop aircraft seating 19 passengers, featuring state-of-the-art aeronautical technology, an innovative design, and high safety standards.

In May 1987, upon the signing of the agreement with FAMA (Fábrica Argentina de Material Aeroespacial—the new name for FMA), the aircraft was renamed the CBA 123 (Brazil-Argentina Cooperation 123).

The aircraft was initially called "Paraná" by the Argentines and "Tapajós" by the Brazilians; however, since the primary goal was to reach the international market, it needed a name that was easier to pronounce in other countries. Consequently, an international contest was held, drawing over six thousand suggestions. The name chosen was "Vector." The CBA 123 made its maiden flight on July 18, 1990. Its official unveiling took place on the 30th of that same month in São José dos Campos. In September 1990, it was showcased at the Farnborough International Airshow in England.

The program was halted in 1991. The aircraft—modern and sophisticated—required substantial investment from its partners, Embraer (a state-owned company at the time) and FAMA. Compounding the situation, the oil crisis made the product uncompetitive to operate. These factors, combined with a shift in the regional aviation market toward aircraft with higher passenger capacity, rendered the project unviable. Terminated in 1992, the CBA 123 saw two fully built prototypes but never achieved certification.