VF Code 

<apex:inputText id="fl_Tools_Tool_21" label="hello" value="{!lname}"/> 

the above line is responsible for the String to lookup conversion....

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<apex:page standardController="User" extensions="toolExtension">
<apex:outputText id="NbLoginTool" value="21" rendered="true"/>
<script src="//ajax.googleapis.com/ajax/libs/jquery/1.9.1/jquery.min.js"></script>
<script type="text/javascript" >

function callonlookupone(val)
{
alert('check'+val.value);
callpicklistmethodone(val.value);

}

function callonlookup(val)
{
alert('check'+val.value);
callpicklistmethod(val.value);

}
function removeTool(idGet, idBut, idRem, fldTool, nbMax)
{
$('[id $="lTool22"]').css('display','none');
$('[id $="fl_Tools_Tool_22"]')="";
}
function loadLoginTool(idGet, idBut, fldTool, nbMax)
{
$('[id $="lTool22"]').css('display','block');
}
</script>
<apex:form id="FrmTools">
<apex:pageBlock >
<apex:pageBlockSection id="UserInfo" title="UserInformation">

</apex:pageBlockSection>

<br></br>
<br></br>
<apex:pageBlockSection id="BSRadio" title="Tools Request" columns="1">
<apex:selectRadio id="ToolsOption" value="{!ToolsOption}" layout="pageDirection" border="1" onclick="sesradio()">
<TABLE BORDER="1" style="width: 100%;">
<apex:selectOption itemValue="0" itemLabel="I have lost my login / password or my account is blocked" />
<apex:selectOption itemValue="1" itemLabel="Access rights for a new tool" />
<apex:selectOption itemValue="2" itemLabel="New plant ERP Access" />
<apex:selectOption itemValue="2" itemLabel="New Purchaser Group (SAP)" />

<script type="text/javascript">
function sesradio()
{
alert("He");
var myradios = document.getElementsByName('{!$Component.ToolsOption}');
for(i = 0; i < myradios.length; i++)
if(myradios[i].checked) {
alert('Selected value is: ' + myradios[i].value);
//LoginTool
if(myradios[i].value=="0") {
$('[id $="LoginTool"]').css('display','block');

}
else
{
$('[id $="LoginTool"]').css('display','none');
}
}}
</script>
</TABLE>
</apex:selectRadio>
</apex:pageBlockSection>

</apex:pageBlockSection>
<div id='LoginTool' style='display:none'>
<TABLE WIDTH="100%" BORDER="1" CELLSPACING="0" CELLPADDING="2">

<tr id='lTool21' >
<TD VALIGN="Top" COLSPAN="2" ><br></br>
<apex:selectList id="tools1" value="{!selectedTool}" size="1" title="tools" onchange="callonlookup(this)">
<apex:selectOptions value="{!tools}" ></apex:selectOptions>
<apex:actionFunction name="callpicklistmethod" reRender="lpanel" action="{!changepicklistvalue}">
<apex:param name="selectedTool" value="{!selectedTool}" assignTo="{!selectedTool}"/>
</apex:actionFunction></apex:selectList> </TD>
<apex:outputPanel id="lpanel" >
<!-- <TD VALIGN="Top" COLSPAN="2" ><br></br> -->
<apex:inputText id="fl_Tools_Tool_21" label="hello" value="{!lname}"/>


</TABLE>
</div>
<apex:pageBlockSection id="NbTool1" >
</apex:pageBlockSection>

<apex:pageBlockSection id="lbutton" >
<apex:commandButton action="{!saveData}" value="Submit"/>
<apex:commandButton action="{!CancelSave}" value="close" />
</apex:pageBlockSection>

</apex:pageBlock>

</apex:form>
</apex:page>

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Apex Controller 

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public class toolExtension {
public RecordedTools__c Recordtools; //User sobject
public SavedRequest__c savedrequest ; // Request Object
public User userData;
public String selectedTool {get;set;}
public String selectedToolone {get;set;}
public String lname{get;set;}
public String lnameone{get;set;}
private Blob fileBody;

public String Manager{get;set;}

public String Name{get;set;}
// Public String titleDisplayRadio{get;set;}
public string ToolsOption {get;set;}

public String lookupvalue{get;set;}

public PageReference saveData ()
{
System.debug('Coming for Saving Data');
savedrequest=new SavedRequest__c();
savedrequest.UserName__c=userData.Name;
savedrequest.Manager__c=String.valueOf(userData.Manager);
savedrequest.fl_Tools_Tool_21__c=lname;  // This is the line which is sending data from String to Lookup Field.
System.debug('SelectedTool...'+selectedTool);
System.debug('ToolData..'+ToolsOption);
savedrequest.ToolsOption__c=ToolsOption;///data auto population
if(lnameone!='')
{
savedrequest.fl_Tools_Tool_22__c=lnameone;
}
insert savedrequest;
System.debug('Saved Data.....');
Pagereference pg = new Pagereference('/' +savedrequest.id);
pg.setredirect(true);
return pg;
}
public toolExtension(ApexPages.StandardController stdController) {
userData = (User)stdController.getrecord();
}

public void changepicklistvalueone()
{
System.debug('lookup val**'+selectedToolone);
ToolResponsible__c toolres = [SELECT p.User__c FROM ToolResponsible__c p where p.DTools__c =:selectedToolone];
User user=[SELECT p.Name FROM User p where p.id =:toolres.User__c];
//System.debug('Val***'+toolres.User__c);
System.debug('Name***'+user.Name);
lnameone = user.Name;
//System.debug "Values"+name;
// System.debug('Name'+name);
//String nametool='Kamal Pandey';
//Tool_21='Kamal Pandey';
System.debug('Name'+lname);
// return lname;
}

public void changepicklistvalue()
{
System.debug('lookup val**'+selectedTool);
System.debug('lookup val1'+ToolsOption);
ToolResponsible__c toolres = [SELECT p.User__c FROM ToolResponsible__c p where p.DTools__c =:selectedTool];
User user=[SELECT p.Name FROM User p where p.id =:toolres.User__c];
//System.debug('Val***'+toolres.User__c);
System.debug('Name***'+user.Name);
lname = user.Name;
//System.debug "Values"+name;
// System.debug('Name'+name);
//String nametool='Kamal Pandey';
//Tool_21='Kamal Pandey';
System.debug('Name'+lname);
// return lname;
}

}

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