In the framework of the TELEO demonstration, a space optical instrument is being developed by a European consortium led by Airbus at Toulouse. This laser communications terminal will be placed on GEO orbit during the year 2023. Our flight laboratory will demonstrate new technologies (such as pointing mechanisms, optical amplifier, Infra-Red camera) and the associated concepts such as Pointing Acquisition and Tracking (PAT) strategy. The optical instrument is composed of a 26 cm telescope steered by a mechanism. The whole structure design ensures high performance of the optics thanks to a low distortion thermo-mechanical concept. A compact Focal Plane Assembly is accommodated under this telescope. It is used to manage with tremendously high rejection efficiency the high optical power Tx and the received beacon and Rx beams. Dedicated electronics also compose the terminal for highly stable thermal regulation, modes and PAT algorithms management, power distribution, mechanisms drivers, detector acquisition, laser sources and optical amplifiers. All the building blocks of the TELEO instrument are now being manufactured and their performances are being measured, before integration and final environment tests on the satellite.