Here is an excerpt from St. John Chrysostom's fourth homily on Ephesians, which deals with this passage:
Ver. 8. For by grace, says he have you been saved.
In order then that the greatness of the benefits bestowed may not raise you too high, observe how he brings you down: by grace you have been saved, says he,
Then, that, on the other hand, our free-will be not impaired, he adds also our part in the work, and yet again cancels it, and adds,
And that not of ourselves.
Neither is faith, he means, of ourselves. Because had He not come, had He not called us, how had we been able to believe? For how, says he, shall they believe, unless they hear? Romans 10:14 So that the work of faith itself is not our own.
It is the gift, said he, of God, it is not of works.
Was faith then, you will say, enough to save us? No; but God, says he, has required this, lest He should save us, barren and without work at all. His expression is, that faith saves, but it is because God so wills, that faith saves. Since, how, tell me, does faith save, without works? This itself is the gift of God.
Ver. 9. That no man should glory.
That he may excite in us proper feeling touching this gift of grace. What then? says a man, Hath He Himself hindered our being justified by works? By no means. But no one, he says, is justified by works, in order that the grace and loving-kindness of God may be shown. He did not reject us as having works, but as abandoned of works He has saved us by grace; so that no man henceforth may have whereof to boast. And then, lest when you hear that the whole work is accomplished not of works but by faith, you should become idle, observe how he continues,
Ver. 10. For we are His workmanship, created in Christ Jesus for good works, which God afore prepared that we should walk in them.
Observe the words he uses. He here alludes to the regeneration, which is in reality a second creation. We have been brought from non-existence into being. As to what we were before, that is, the old man, we are dead. What we are now become, before, we were not. Truly then is this work a creation, yea, and more noble than the first; for from that one, we have our being; but from this last, we have, over and above, our well being.
For good works, which God afore prepared that we should walk in them.
Not merely that we should begin, but that we should walk in them, for we need a virtue which shall last throughout, and be extended on to our dying day. If we had to travel a road leading to a royal city, and then when we had passed over the greater part of it, were to flag and sit down near the very close, it were of no use to us. This is the hope of our calling; for for good works he says. Otherwise it would profit us nothing.
I'm of the mind that this passage should be taken together which such passages as
But God commendeth his love toward us, in that, while we were yet sinners, Christ died for us.
As Chrysostom says, God did not reject us as having works, but as abandoned of works
He has saved us by grace. Before, we were "children of wrath" (Ephesians 2:3). We were "dead in our sins" (Ephesians 2:5).
We had no works which could justify us, and yet:
For God so loved the world, that he gave his only begotten Son, that whosoever believeth in him should not perish, but have everlasting life.
Note that Chrysostom sees the passage in Ephesians as referring to baptism. Now, when each of us was received into the Church, was it because of our good deeds? No. God, in His infinite mercy and love, saved us by grace through faith. What is required for baptism is to have faith in Jesus Christ.
Baptism is, like our first birth according to the flesh, totally gratuitous
. It is not our work, but God's.
Even when we were dead in sins, hath quickened us together with Christ, (by grace ye are saved;)
This should remind you of the baptismal hymn "as many as have been baptized into Christ, have put on Christ. Alleluia", which comes from Galatians 3:27.
God created us in baptism unto good works.
In baptism, we die with Christ and are raised with Him in glory: we are SAVED; but then we must "work out our salvation"; we must make Christ's victory over sin and death a personal, existential reality in our life through ascetic struggle against the passions, putting to death continually the old man so that Christ may live and reign in our hearts.
Know ye not, that so many of us as were baptized into Jesus Christ were baptized into his death?  Therefore we are buried with him by baptism into death: that like as Christ was raised up from the dead by the glory of the Father, even so we also should walk in newness of life.  For if we have been planted together in the likeness of his death, we shall be also in the likeness of his resurrection:  Knowing this, that our old man is crucified with him , that the body of sin might be destroyed, that henceforth we should not serve sin.  For he that is dead is freed from sin.  Now if we be dead with Christ, we believe that we shall also live with him:  Knowing that Christ being raised from the dead dieth no more; death hath no more dominion over him.  For in that he died, he died unto sin once: but in that he liveth, he liveth unto God.  Likewise reckon ye also yourselves to be dead indeed unto sin, but alive unto God through Jesus Christ our Lord.  Let not sin therefore reign in your mortal body, that ye should obey it in the lusts thereof.  Neither yield ye your members as instruments of unrighteousness unto sin: but yield yourselves unto God, as those that are alive from the dead, and your members as instruments of righteousness unto God.
Of course, the whole life in Christ continues to be actuated by grace, but this does not exclude our effort. The Orthodox doctrine is synergy, that is, that we work with God.