In this study, we are presenting design considerations for the development of a LED (Light-Emitting Diode) bi-function headlight module to replace conventional HID (High-Intensity Discharge) projector modules for retrofitting or first installation purposes. The objective was to develop a projector-type module to outperform current 35 W HID light sources in both low beam and high beam, but with far less installation space. Essential features like multichip LED usage and the optical system design will be described in detail. Special care was taken for the heat management of the high-power LEDs, with optimization of the heat dissipation thermal path via printed circuit board, heatsink and active cooling by extensive Computational Fluid Dynamics simulation work (CFD). The achieved projector lumen output of greater 1300 lm in low beam and 2000 lm in high beam enables a projector module of very compact size (<1,200 cm3) to easily replace HID modules.