Baiq Nuril Maknun, 37, had complained of getting lewd phone calls from the headteacher of the school she worked at in Mataram, a city on the island of Lombok.
She recorded one of the calls in which the head teacher allegedly made sexually explicit and abusive comments. The recording was later distributed among staff at the school and submitted to the head of the local education agency. It also went viral on social media.
The headteacher - who court documents say lost his job after the recording was circulated - reported her to the police for distributing the recording of their conversation. She says it was shared by someone else, the BBC reported.
A local court initially cleared the woman but prosecutors took the case to the Supreme Court. It found her guilty in November of "violating decency" and fined her 500 million rupiah ($35,200).
The woman was held in police custody during the trial for two months and three days, but did not serve time in prison.
President Joko Widodo had previously said he would consider a request for a pardon if she failed in her legal appeals. Her lawyers stressed their client had not committed a crime.
Widodo granted the woman amnesty after the apex court rejected her appeal.
The mother of three wept as she told Parliament: "Don't let anyone else have an experience like mine. It hurt so much. I hope there won't be any more victims, and women should dare to speak up."
Activists say the case highlights Indonesia's lack of safeguards for women in sexual harassment cases.
( With inputs from IANS )