We propose a dynamic lossless all-optical polarization gate using coherently prepared atomic media. We show that the loss/gain of two circularly polarized components of a linearly polarized probe field can be simultaneously eliminated by locking the power of the pump field and the external magnetic field intensity simultaneously. Using the polarization selective Kerr phase shift method, we can write π/2 (-π/2) phase shift to the right (left) circularly polarized component of the linearly polarized probe field with a choice of "magic" wavelength for the probe field. Consequently, the linear polarization state for the probe field acquires a 90° rotation at the exit of the medium. The scheme proposed in this Letter is helpful for applications in optical and quantum information processing and computation.