Removes dipeptides from the C-termini of N-blocked tripeptides, tetrapeptides and larger peptides. Hydrolysis of unblocked, C-terminal dipeptides from oligopeptides, with broad specificity. Does not hydrolyze bonds in which P1' is Pro, or both P1 and P1' are Gly. Binds 1 zinc ion. Stimulated by Mn(2+), Mg(2+), Co(2+) and Ca(2+), inhibited by Cu(2+), Ni(2+), Zn(2+), chymostatin and 1,10-phenanthroline. Unable to grow on N-benzoyl-Gly-His-Leu as a nitrogen source. Belongs to the peptidase M3 family.