The Lute is an important item from the original Final Fantasy. Entrusted to the princess of Cornelia for many generations, Princess Sarah gives it to the proven Warriors of Light after they rescue her from the renegade knight Garland, who himself took it in his abduction of Sarah.
It is used by the Warriors to reveal a hidden passage in the Chaos Shrine 2,000 years in the past, which leads down to the Four Fiends and Chaos himself. After the Warriors defeat Chaos, Princess Sarah is seen in the credits of the PlayStation version playing the Lute at court, presumably telling the story of the Warriors of Light.
A Lute, called Noah's Lute, also plays an integral role in Final Fantasy III. It is used by that game's Warriors of Light to awaken Unei after she appears to them in a dream. Once awakened, Unei leads the party to the airship Invincible and guides them along their path.