Schapelle Corby could be released by August this year after her appeal for clemency was approved this afternoon.
President Susilo Bambang Yudhoyono has slashed Schapelle's sentence by five years. It is the most dramatic reduction so far and has significant ramifications.
The Indonesian Government confirmed this significant development however it remains unclear when the convicted drug trafficker will be eligible for release.
A five-year reduction means that she could be free by August this year as she immediately becomes a candidate for early release.
Even if she isn't granted parole, with further reductions in the remaining six years of her sentence, she can be out in three years.
Foreign Minister Bob Carr said in a statement released: "I welcome the Indonesian President’s decision to grant this reduction.
"The Australian Government has consistently supported Ms Corby's application for clemency on humanitarian grounds."
7News broke the news to Schapelle's sister Mercedes who said she was rattled by the development.
A presidential letter approving clemency arrived a short time ago at Kerobokan Prison however Schapelle hasn't yet been informed. She will be told the news tomorrow morning.
Recommendation received in April
It was revealed in April that Indonesia's Justice Ministry had recommended that Corby be granted a significant cut in her 20-year sentence on humanitarian grounds.
Indonesia's Supreme Court has also recommended that the 34-year-old, caught in 2004 attempting to smuggle 4.1 kilograms of marijuana into Bali in a bodyboard bag, receive a five-year cut in her sentence.
Corby has already had two years cut from her sentence for good behaviour as part of remissions announced each year at Christmas and on Indonesia's Independence Day.
Her clemency application, lodged in March 2010, appealed for an early release on the grounds she was suffering from a mental illness that could endanger her life.
Corby's family has confirmed she is being treated with anti-depressant and anti-psychotic drugs. 7News Exclusive: Mercedes talks about Schapelle's attempted overdose
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