An Indonesian man jailed for his role in the deadly 2002 Bali bombings that killed hundreds of people could be released on parole in the coming days after the latest reduction in his sentencing, a law official said on Friday.

Umar Patek, a member of the Al Qaeda-linked militant group Jemaah Islamiyah, was sentenced to 20 years jail by an Indonesian court in 2012 after he was found guilty of mixing bombs that ripped through two Bali nightclubs a decade earlier, killing 202 people.

Patek, who was also convicted for his role in deadly church bombings in 2000, was granted a five-month reduction as part of a series of remissions regularly given to inmates on Indonesia's independence day on Aug 17.

Zaeroji, head of the law and human rights office in East Java where Patek is jailed, told Reuters that the bomber was now eligible for parole this month because he had served two-thirds of his sentence after a series of such reductions.

The matter has been passed to the central government for final approval, he said.

"We have proposed this to the justice and human rights ministry and from there it will be decided," said Zaeroji, who goes by one name.

The justice and human rights ministry did not respond to a request for comment from Reuters.

The decision has sparked concern in Australia where Prime Minister Anthony Albanese said Patek's release would have a devastating impact on the victims' families.

"We lost 88 Australians in that terrorist attack, and it was a barbaric attack," Albanese told reporters in Queensland.

"They have a system whereby when anniversaries occur, quite often sentences are reduced and commuted for people. But when it comes to someone who's committed such a heinous crime, a designer and maker of a bomb designed to kill people, to kill and maim, then we have a very strong view," he said.

Albanese said his government will make diplomatic contact with Indonesia over the case.

On the run for nine years, there had been a $1 million dollar bounty on Patek's head before he was finally apprehended in Abbottabad, Pakistan, in 2011, in the same town where Osama bin Laden was killed several months after his arrest.

Bali bombing mastermind Hambali, also known as Encep Nurjaman, is currently detained at Guantanamo Bay in Cuba and has been awaiting trial since 2006.