Layer-3 in the OSI model is called Network layer. Network layer manages options pertaining to host and network addressing, managing sub-networks and internetworking.
Network layer takes the responsibility for routing packets from source to destination within or outside a subnet. Two different subnet may have different addressing schemes or non-compatible addressing types. Same with protocols, two different subnet may be operating on different protocols which are not compatible with each other. Network layer has the responsibility to how to route packets from source to destination, mapping different addressing schemes and protocols.
Devices which works on Network Layer mainly focus on routing. Routing may include variety of tasks aimed to achieve a single goal. These can be:
Addressing Devices and Networks.
Populating Routing tables (or static routes).
Queuing incoming and outgoing data and then forwarding them according to Quality of Service constraints set for those packets.
Internetworking between two different subnets.
Delivering packets to destination with best efforts.
Provides connection oriented and connection less mechanism.
Network Layer Features
With its standard functionalities, Layer 3 can provide various features:
Load balancing and link management.
Interrelates different protocols and subnets with different schema.
L3 can produce different logical network design over the physical network design.
L3 VPN and tunnels can be used to provided end to end dedicated connectivity.
Internet protocol is widely respected and deployed Network Layer protocol which helps to communicate end to end devices over the internet. It comes in two flavors. IPv4 which has ruled the world for decades but now is running out of address space. IPv6 which has been created to replace IPv4 and hopefully mitigates IPv4’s limitations too.