Satinah Binti Jumadi Ahmad was sentenced to death in 2011 for murdering her employer's wife and stealing money. She was due to be beheaded in the coming days.
Her case has attracted huge media attention in Indonesia and there was a campaign in recent weeks to stop the execution from going ahead.
Under Islamic sharia law followed in Saudi Arabia, the family of a victim can settle for "blood money" instead of an execution.
Indonesian Security Minister Djoko Suyanto said today that the government had agreed to provide the remaining three million.
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"We have agreed to fulfil the family's demands," he told reporters in the capital Jakarta.
"This will help to save Satinah from the death penalty."
The family had initially asked for 15 million riyals but agreed to lower it, he added.
The Indonesian government has fought a long battle to save the maid and had already managed to get the execution delayed five times since her conviction.
If Ahmad was beheaded, it could have set back attempts by Indonesia and Saudi Arabia to mend ties damaged by the 2011 beheading of an Indonesian maid, who was also guilty of murder.
That execution infuriated Indonesia, particularly as Saudi officials failed to inform Jakarta beforehand, and authorities placed a moratorium on sending new maids to Saudi Arabia, which remains in place.