Attorney General Muhammad Prasetyo said he had suspended enforcement and a 500-million rupiah (US$35,200) fine imposed by the Supreme Court this month.
Prasetyo said he had heard the “growing feeling for justice”.
President Joko Widodo had promised to grant a presidential amnesty when the case reached his desk.
Baiq Nuril Maknun in 2014 was working at a school on Lombok when she began receiving calls from the headteacher describing an intimate relationship with another woman.
The man, Haji Muslim, insisted Maknun accompany him and his sexual partner on trips.
The mother of three recorded one of the calls and played it to colleagues to dispel rumours she was having an affair with him.
She was subsequently prosecuted for violating the controversial electronic communications law for circulating indecent content and defamation.
Muslim was transferred to another position and faced no investigation for his behaviour. He reported Maknun to the police for spreading pornographic content and sued her for defamation. The claims were rejected by a regional court but upheld in the Supreme Court last week.
An online crowdfunding appeal helped pay her legal costs last year.
Nine human rights groups, including the Asian Forum for Human Rights and Development and Indonesian Legal Aid Foundation, said the ruling “perpetuated the culture of victim-blaming”.
Despite the stress, Maknun said she would not back down.
“You must be brave and report,” she told the BBC. “Don’t be afraid to tell the truth. There are so many principled people out there, you must fight for your rights too.”
Indonesia’s #MeToo movement has had limited effect in the predominately conservative Islamic society. Indonesia still imposes virginity tests on women who want to join the military or police.
Despite the tests not being recorded, they are still conducted throughout Indonesia as a “morality or physical examination”.
Andreas Harsono of Human Rights Watch said Indonesian police believed society would not accept a policewoman who had an active sex life or used to be a sex worker.
Two fingers are inserted into the vagina to inspect the hymen, which is invasive and proves nothing as the hymen can easily break during actives like horse riding.
Harsono said the practice is common in the military, where around 70 per cent of the staff who conduct the tests are male doctors.
Indonesian women suffer from high levels of discrimination. Picture credit: Wikimedia