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The division was formed on 24 July 1944 at Stablack in Wehrkreis I (East Prussia) as the 2nd Grenadier Division East Prussia (German: Grenadier-Division Ostpreußen 2). The division had a mere four grenadier battalions. It had the following organisation:
Finally, it fought on its home territory opposing the Red Army's East Prussian offensive. Most of the division was destroyed in the Heiligenbeil Pocket in March 1945. Only a small part of the division evacuated via the sea to the Hel peninsula together with the 4th Army. The division was disbanded on 16 April 1945 and its survivors were captured by the Soviets. The division's staff was later used as the staff of the 4th Reich Labour Service Division.