A 4.5 at.% Tm, 0.5 at.% Ho:LiYF4 planar waveguide (thickness: 25 μm) grown by Liquid Phase Epitaxy is in-band pumped by a Raman fiber laser at 1679 nm (the 3H6 → 3F4 Tm3+ transition). A continuous-wave waveguide laser generates a maximum output power of 540 mW at 2051nm with a slope efficiency of 32.6%, a laser threshold of 337 mW and a linear laser polarization (π). This represents the highest output power extracted from any Tm,Ho waveguide laser. No parasitic Tm3+ colasing is observed. The waveguide propagation losses are determined to be as low as 0.19 dB/cm.