Lutze was born Ernestine Elsterwerda in Merzdorf in 1873. She attended primary school in Dresden and Großenhain, and began working as a maid aged nine. She later became a florist and a board member of the Flower Worker's Association and married painter Karl Otto Lutze. In 1911 she attended trade union school in Berlin. Back in Dresden, she became a committee member of the regional health insurance fund and in 1917 was appointed to Dresden City Council's housing committee. After the outbreak of the German Revolution in 1918, she became a member of the city's Workers' and Soldiers' Council.