The L version would not be able to enter production with the DB 600 (Daimler-Benz 600) engine due to its use in the Bf 109, and the Bramo engine was rather thirsty and left the M models with too short a range for reconnaissance use. The 865 hp BMW 132N radial engines were selected because they had lower fuel consumption and a consequent better range.

The Do 17 L-0 and Do 17 M-0 were developed in parallel as replacements for the E and F, the L being the reconnaissance version and the M the bomber version. Two L versions and one M were built as prototypes.