Schütze was born in Flensburg, and started his naval career in the Reichsmarine aboard German torpedo boats in April 1925, before transferring to the new U-boat division ten years later in October 1935. There he commanded U-19 for two years, before being relieved to take destroyer training - before returning to the U-boat arm in command of U-11. When war broke out he commanded U-25, with which he sailed on three patrols, mainly in the Bay of Biscay and off the Portuguese coast.
In July 1940 he assumed command over the Type IXB U-103, and commanded for four patrols in North Atlantic and African waters. In December he received the Knight's Cross of the Iron Cross for his successes. In August 1941 he retired from front service, taking up positions as Flottillenchef of 2nd U-boat Flotilla. In March 1943 he became the FdU Ausbildungsflottillen (Commander of the training flotillas in the Baltic Sea) in Flensburg-Kappeln, in which position he served until the end of the war. He died in Frankfurt am Main in 1950.