PA44 instructor pilot on short final with student reports conflict with a King Air entering the runway for takeoff. King Air flight was also instructional and apparently on the CTAF but did not hear the reporters calls or see him on short final.

Narrative

While we were on short final transitioning to a landing from the ILS; a King Air entered the runway for departure. We were on approximately 1/3 mi. final at about 200 AGL. We made calls on the CTAF frequency when turning inbound and at 5nm from the airfield and at 3 nm from the airfield. The King Air made one call during this time stating that they were 'taxiing for Runway XX'. The next call they made was as they rolled onto the runway for departure. I used the radio to inform them that we were on short final; at which point they executed a 180 degree turn on the runway numbers and taxied clear as my student was executing a go-around. We passed just about right overhead the King Air at an altitude of less than 150' AGL. I believe the crew of this aircraft (also a training flight) was likely on the radio with Center or FSS receiving IFR clearance while I was on the approach (I had canceled IFR while outbound on the approach); but this still does not relieve them of the need to both monitor the CTAF and also VISUALLY CLEAR THE RUNWAY ENVIRONMENT prior to entering it. Had they simply checked the final approach; the presence of a light twin over the middle marker should have been very apparent. Contributing to making the problem worse was the fact that my student was just going visual after spending the whole approach under the hood; so he had very little time to evaluate why there was traffic on the runway as I told him to go-around; so his decision time was undoubtedly delayed; during which time we descended a bit closer to the King-Air.