The prisoner of war camp is established

In preparation for the German invasion of the Soviet Union, the Armed Forces High Command (OKW) ordered 60 new camps to be established exclusively for the purpose of housing Soviet prisoners of war. Each camp was designed to accommodate 30,000 prisoners upon completion. Most of the camps were to be established in the occupied territories of Poland and the Soviet Union. However, fourteen sites in Germany were selected as well. In April 1941 preparations were begun to erect a camp on the grounds of the Zeithain military training centre immediately adjacent to the Jacobsthal railway station.

Yet by autumn of 1941, not a single hut had been completed. For the first few months, the camp consisted solely of an open compound surrounded by a barbed wire fence. The prisoners of war had no protection against sun, rain and cold. In July 1941 Soviet prisoners of war first had to erect permanent quarters for the guards and a service building. It was September before they could begin building their own huts. The camp was only completed in late 1942.

Zeithain was one seven camps in Military District IV (Saxony) and was listed under the designation Prisoner of War Personnel Main Camp Stalag 304 (IV H) Zeithain. In September 1942, Zeithain was made a branch camp of Stalag IV B in nearby Mühlberg and was renamed Stalag IV B/Z. This reassignment remained in effect when the camp was converted to the Prisoner of War Reserve Hospital Zeithain in February 1943.

In 1941-42 the camp acted as a central receiving and distribution camp for Soviet prisoners of war in Military District IV. Prisoners who were unfit for labour remained in the camp whereas the others were sent to other camps in the military district which then distributed them among the work details. Stalag 304 (IV H) maintained work details of its own only within the camp itself and in the immediate vicinity, such as at the military training centre and the army munitions facility in Zeithain.