The spectral and laser properties of 3 at.% Yb3+:Lu3Al5O12 ceramics produced by a new method of nanocrystalline pressure-less sintering in H2 were investigated. The studied sample had a transmittance close to the theoretical value (83.3% at λ = 1070 nm) and a laser level lifetime of 0.93 ms. Laser generation in different regimes with a maximum slope efficiency of 54% and a maximum average power of 206 W was attained, which makes this method highly promising for producing ceramics for lasers with multi-kilowatt average power.