The 24-year-old woman from Cengkarang, in the west outskirts of Jakarta, had bought a live chicken in the market and slaughtered it there before taking home.
On December 14, she fell sick and was admitted to a hospital five days later. She tested positive for bird flu and died six days later on December 25.
Indonesia has the world's largest amount of human deaths from bird flu, with 94 deaths registered since the first report, in 2005, of a human becoming infected with the disease in the country, the World Health Organization said.
A total of 207 deaths have been registered worldwide by the organization since 2003.
Although no cases of human-to-human transmission of avian influenza have been reported, scientists fear the virus could mutate into a strain that could pass easily from person to person, causing a global pandemic.
