"I call on Russia and Ukraine to embark on an immediate cessation of hostilities," Prabowo Subianto said, noting that the more than 15-month conflict had a severe impact on Asian nations' economies and food supplies.
In a speech to the Shangri-La Dialogue defence summit, Subianto proposed a ceasefire "at present positions", and demilitarised zones that would be guaranteed by observers and United Nations peacekeeping forces.
He also suggested an eventual "referendum in the disputed areas" organised by the UN.
"Indonesia is prepared to contribute units to a potential UN peacekeeping operation," he added.
China has presented its own peace plan to end the war -- a vague list of proposals to which European Union politicians have reacted with scepticism.
While Beijing says it is a neutral party to the conflict, it has been criticised for refusing to condemn Moscow's invasion.
In contrast, the United States and Western allies have delivered billions of dollars in weapons and other aid to Ukraine since Russia's invasion.
Jakarta, which favours non-aligned diplomacy, had previously attempted to mediate peace.
Indonesian President Joko Widodo travelled to Kyiv and Moscow and met the nations' leaders last year, while his country chaired the G20 bloc of major economies.
But defence chief Subianto's proposal was criticised at the summit on Saturday, with EU foreign policy chief Josep Borrell saying peace in Ukraine had to be achieved on "just" terms.
"We need to bring peace to Ukraine", but it must be a "just peace, not a peace of surrender," Borrell said, commenting on the Indonesian proposal.
Subianto responded, raising his voice: "Ask Indonesians how many times they have been invaded... There are violations of sovereignty not only in Europe."
"I'm putting forward a conflict resolution plan," he added. "I'm not saying who is right or who is wrong."
Indonesia voted in favour of a UN resolution condemning Russia's invasion of Ukraine, but it has not applied economic sanctions against Moscow.
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