Acknowledgement of the limited learning outcomes in our first-year physics lab course, strikingly similar to the observed and reported issues in literature, incited renewal of the course with a focus on developing students' ability to engage in experimental physics research. The "procedural and conceptual knowledge (PACKS) model"--addressing different types of knowledge required for scientific investigation--was used as a "guide" in the transformation of the course. This educational design research study--distinguishing three stages--describes our approach in transforming the course and provides theoretical insights and practical solutions through the combined study of both the process of learning and the means that support that process. The merits and trade-offs of our approach and the effectiveness of the course transformation are evaluated through surveys, interviews, and assessment of students' inquiry skills. The findings provide insights into the application of the PACKS model and its effectiveness in facilitating students' development of physics inquiry abilities. The results reveal an alignment between perceived, attained and intended learning goals. The self-conceived experiment at the end of the course showcases students' successful integration of the targeted knowledge types, previously addressed in isolated "preparatory" activities. We argue that the PACKS-model and the design principles are useful attributes when transforming a traditional lab activity, but also specify the limitations.