Corby, 34, was convicted in 2005 of smuggling more than four kilogrammes of marijuana and is serving a 20-year jail sentence at the overcrowded Kerobokan prison on the resort island of Bali.
She filed for clemency in 2010 and the Ministry of Justice and Human Rights made its recommendation to Yudhoyono the following year, but its details were not disclosed at the time.
But a ministry official told AFP on Tuesday that it had suggested a five-year reduction and that the recommendation still stood.
“We suggested a five-year sentence cut for Corby by the Indonesian president,” the official said, speaking on condition of anonymity.
Since she was convicted in May 2005, Corby, like many other prisoners, has had her sentence cut by three-to-five months every year.
Such reductions are standard practice and are awarded for good behaviour to mark Indonesia’s Independence Day.
At the end of 2011 her sentence had been reduced by a total of 22 months, meaning she is currently due to remain in jail until 2023 if her sentence is not further reduced.
Her lawyer Iskandar Nawing has repeatedly called for Corby to be released immediately on health grounds.
He said earlier this month that Corby had been examined by an Australian psychiatrist in her cell, and found to have gone insane.
“I do hope President Yudhoyono will consider Corby’s mental state and grant her an immediate release,” he told AFP.
The president has the final decision on clemency, including the power to order an immediate release, but is under no obligation to respond to the ministry’s recommendation or appeals by her lawyer.
Kerobokan is one of Indonesia’s most notorious prisons, whose 1,000 inmates include 60 foreigners, 12 of whom are Australian.