The appeals court in Frankfurt ordered pilots to halt their two-day industrial action, ruling that the stoppage, the 13th in 18 months, was unlawful.
It thus overturned a lower court ruling Tuesday and agreed with Lufthansa that the primary aim of the pilots' union, Vereinigung Cockpit, did not appear to be to reach a concrete agreement on early retirement provisions, but to attack management's proposed restructuring concept, known as Wings.
Lufthansa has embarked on a massive reorganisation, farming out much of its domestic and medium-haul services to its low-cost subsidiary Germanwings.
The court argued that the Wings concept was an entrepreneurial matter.
"There are a number of factors that suggest that, above and beyond the strike's official target, the union is seeking to have a say in the 'Wings' concept. This is not a goal that can be negotiated by the union. Hence, the strike is unlawful," it ruled.
Ostensibly, the dispute hinges on Lufthansa plans to scrap an arrangement under which pilots can retire at 55 and receive up to 60 percent of their pay until they reach the statutory retirement age of 65.
But pilots are also concerned about Lufthansa's wider aim to further develop its low-cost activities as it faces growing competition.
It is the first time in the 18-month dispute between management and unions that such an injunction has been granted.
Normal flights resume Thursday
Lufthansa welcomed Wednesday's ruling, but said it would not be able to return to normal operations until Thursday.
"As far as possible, the normal flight timetable will be available again from tomorrow," it said.
Management and the unions have been locked in a bitter dispute since April 2014, with pilots staging repeated walkouts, often at very short notice.
The latest strike initially affected long-haul flights on Tuesday, but Cockpit extended it to short- and medium-haul services on Wednesday to turn up heat on the management.
The strike only affects Lufthansa services, while flights by its subsidiaries - Germanwings, Swiss, Austrian Airlines and Brussels Airlines - are operating normally.
Passengers on domestic flights are being allowed to swap their tickets for journeys on the German national railway, Deutsche Bahn.
Lufthansa management has upped the ante by seeking damages of 60 million euros ($67 million) from Cockpit for loss of earnings from a strike back in April 2014, when the wage agreement with pilots at the time was still in force.
In the past 18 months, pilots have staged repeated walkouts, but suspended industrial action in March after a Germanwings jet crashed in the French Alps, killing all 150 people on board, in a disaster blamed on a suicidal co-pilot.
The BDI industry federation warned that the repeated stoppages could hit the wider economy.
And conservative lawmaker Michael Fuchs said the dispute could be "extremely dangerous" for Lufthansa's competitiveness, calling on both sides to seek outside arbitration.