Players grieved after the disaster at the Kanjuruhan stadium
President Joko Widodo said the Kanjuruhan stadium in Malang would be rebuilt according to safety standards set by the sport's governing body Fifa.
He said the country must "thoroughly transform" how it managed the sport.
Mr Widodo made the announcement after meeting Fifa president Gianni Infantino earlier on Tuesday.
Indonesia is set to host the 2023 under-20 World Cup, and the pair agreed to form a joint task force ahead of the event.
Speaking alongside Mr Widodo, the Fifa chief said it was imperative that fans attending the tournament were provided with a safe environment.
"This is a football country, a country where football is a passion for over 100 million people," he said. "We owe it to them that when they see a match they are safe and secure."
On 1 October, fans were caught in a deadly crush as they attempted to leave the Kanjuruhan stadium after the defeat of the home side Arema FC by Persebaya Surabaya.
Six people, including police officers and organisers, are facing criminal charges over the crush, which is one of the world's worst stadium disasters.
They will be charged with criminal negligence causing death, which carries a maximum sentence of five years.
An investigation published last week ruled that the tragic incident had been sparked by police firing tear gas into the stands - a crowd control measure banned by Fifa.
The report also found several other contributing factors, including the stadium being filled beyond capacity and locked exit doors, as well as a push by league officials to hold the game at night to secure higher television ratings.
Investigators also called on the Indonesian Football Association's board to step down, urging them to "resign as a form of responsibility".
But Mr Infantino has already assured organisers that Indonesia will not have the 2023 under-20 event stripped from it.
Some 24 countries will compete in venues across six Indonesian cities next summer. The Kanjuruhan stadium was not due to host any games during the competition.
-- Courtesy of BBC Sport