Indonesia's parliament approved legislation on Tuesday that would outlaw sex outside marriage in a move critics said was a huge setback to rights in the world's most populous Muslim country.

After the new criminal code was endorsed by all nine parties in a sweeping overhaul of the legal code, deputy house speaker Sufmi Dasco Ahmad banged the gavel to signal the text was approved and shouted "legal".

A revision of Indonesia's criminal code, which stretches back to the Dutch colonial era, has been debated for decades.

Rights groups had protested against the amendments, denouncing a crackdown on civil liberties and political freedoms, as well as a shift towards fundamentalism in Muslim-majority Indonesia, where secularism is enshrined in the constitution.

"We have tried our best to accommodate the important issues and different opinions which were debated," Minister of Law and Human Rights Yasonna Laoly told parliament.

"However, it is time for us to make a historical decision on the penal code amendment and to leave the colonial criminal code we inherited behind."

The article criminalizing sex outside marriage has been criticized by Indonesian business organizations as detrimental to tourism, though authorities insist foreigners traveling to Bali would not be affected.

The new code, which still needs to be approved by President Joko Widodo, will come into force after three years.

One year in prison

Some of the most controversial articles in the new code criminalize extra-marital sex, as well as the cohabitation of unmarried couples.

According to the text seen by AFP, sex outside of marriage will be punished with one year in prison while unmarried people living together could face six months in jail.

Albert Aries from the Law and Human Rights Ministry defended the amendments before the vote and said the law would protect marriage institutions.