Bali Island, Indonesia  - Indonesia on Monday reduced the jail terms of thousands of prisoners, including two convicted Australian drug traffickers, as part of the country's Independence Day celebrations.

Up to 29,000 prisoners across the country who have completed at least one-third of their sentences were granted reductions ranging from several weeks to several months.

A four-month reduction was granted to Australian drug trafficker Schapelle Corby, the third time authorities had cut the 32-year-old's sentence.

Corby was sentenced to 20 years' jail after she was caught at Bali's Ngurah Rai airport in 2004 with more than 4.2 kilograms of marijuana in her boogie board bag.

Renae Lawrence, the only female member of the so-called "Bali Nine" ring of Australian heroin traffickers, also received a five-month cut from her 20-year sentence.

Lawrence was sentenced for her role in a failed plot to smuggle more than 8 kilograms of heroin from Bali to Australia in 2005.

"They received the remissions because they have served more than two years of their sentences and they are on good behaviour in prison," said Siswanto, the head of Bali's Kerobokan prison.

The two Australians were among 321 prisoners in Kerobokan prison to receive remissions. Twenty-three of them were set free.

Also receiving remissions were those convicted of terrorism, illegal logging and corruption, getting sentence reductions between two and six months.

Indonesia traditionally cuts jail terms on Independence Day and some religious holidays.

Indonesia achieved independence from Dutch colonial rule in 1945. (dpa)