Environment Minister Rachmat Witoelar told Reuters the plan had been developed after authorities had struggled to plug the leak over the past few months using more conventional methods.
“To overcome this, we will expand the area for the mud, second we will process the mud to naturalise it and the water can flow either to the sea or to the river,” the newswire quoted him as saying.
The new plan is expected to clear the vast area currently engulfed by the mud, in around three months.
Toxic mud began spewing from the well, which is operated by Indonesian company Lapindo Brantas, in May after a “well control incident”.
Meanwhile, the increasing build-up of mud, which is still flowing from well, caused further damage on Thursday when it breached a watershed that had been protecting two villages. According to Reuters, the result sent dark-gray water up to chest height gushing into the area.
Also this week, a major toll road in the region had to be closed after hot mud was said to have engulfed a large section of the highway.
Hundreds of people have also been hospitalised as a result of the noxious fumes emanating from the mud.
Australian oil and gas major Santos holds an 18% stake in the well and has previously told the Australian Stock Exchange that it holds “appropriate insurance coverage for these types of occurrences”.