It would be carried out by injecting paedophiles with female hormones that would reduce sex drive, he said.
Government data show that child abuse cases had jumped from 2,178 cases in 2011 to 5,066 cases in 2014.
Prasetyo said the punishment would be authorised soon through a presidential directive, which means it will automatically become law without parliament having to vote on it.
The ruling, signed by the country’s president, will make Indonesia the first south east Asia country to use chemical castration on sex offenders, following in the footsteps of Russia, Poland, South Korea and some states in America.
Parliament passed the new laws on Wednesday following the brutal rape and murder of Yuyun as she walked home from school.
President Widodo said the law will aim to prevent the sexual abuse of children across the country.
Her body was found in local woods, tied up and naked three days after she went missing.Seven teenagers, aged 16 and 17, were arrested for their part in the horrifying murder, which sparked protests across the country.