In the late 1980s, the Panama City-Bay County Airport and Industrial District (Airport Authority) started discussing the need to expand the airport's two runways, which did not meet federal standards due to insufficient runway safety areas. Growing the overall airport to meet the region's needs was another main objective.

The old airport had been built in 1932, with scheduled service beginning in 1948. However, it did not have enough room to expand. Proposed ideas included using the current airport property and extending the current short runways into St. Andrews Bay or into residential neighborhoods, relocation of the airport to a new site, or collocation with Tyndall AFB. With strong opposition to extending the runways into an environmentally sensitive bay or into neighborhoods, the airport authority began to search for relocation sites. The authority received tentative approval to build a new airport in northwestern Bay County in 2001. In 2005–2007 the authority obtained the needed permits.

The relocation of the airport was controversial in Bay County. The county commission chose to proceed with building a new airport and closing down Fannin Field despite a majority of voters in a non-binding 2004 referendum voting against the plan. Some felt that the St. Joe Company, which owned the land the airport would be based on, would derive an unfair benefit at the taxpayers' expense. Suits were filed against the airport on environmental grounds but were not successful in halting its construction. Construction was completed in May 2010, however the planned crosswind runway was not built. As of January 2024 construction of the airport terminal has begun to extend the terminal south adding a second baggage claim. News has also been released stating the originally planned crosswind runway's construction will begin in late 2024 to early 2025 expected to accept passengers by June 2025. The new crosswind runway will span a total of 10,000 feet and will allow airlines and general aviation pilots to land during heavy crosswinds more comfortably.

The airport originally sought to use TFB as its IATA code, for "The Florida Beaches". However, this code was already taken by the Tifalmin Airport in Papua New Guinea. The code ECP was chosen instead, which officially stands for Emerald Coast of the Panhandle. The phrase "Everyone Can Party" was jokingly applied to the code.