For decades, the army has subjected female recruits -- as well as, in some instances, the prospective wives of male soldiers -- to the "abusive, unscientific, and discriminatory" tests, Human Rights Watch said in a statement on its website.
During the invasive tests, women have two fingers inserted into their vagina by a doctor of either sex, in a bid to assess whether they have an intact hymen.
Human Rights Watch said the practice amounts to "gender-based violence."
Virginity testing is a widely discredited and condemned practice that the World Health Organization has said has "no scientific validity" and is a "violation of the victim's human rights."
Speaking on a teleconference that was uploaded to YouTube last month, Indonesian army Chief of Staff General Andika Perkasa implied that the procedure would be stopped, with training instead focused on "capability."
"We have to be consistent. The selection we do for men should be the same (as) tests for women, in terms of testing their capabilities to follow the basic of military training," he said in the broadcast.
Some tests, he added, were now "unnecessary" and "irrelevant."
Painful and traumatizing
Human Rights Watch welcomed the apparent move in its statement, but it said virginity testing was still used in the country for recruitment to other national roles.
"The army command is doing the right thing. It is now the responsibility of territorial and battalion commanders to follow orders, and recognize the unscientific, rights-abusing nature of this practice.
"Increased pressure also needs to be focused on the top commanders of the navy and the air force to follow the army's lead, and end this practice," the organization said.
Virginity testing has also been used on female police recruits, according to Human Rights Watch.
In 2014, an investigation by the rights group exposed the practice in Indonesia's security forces, including the police.
At the time, Human Rights Watch quoted a 24-year-old woman who said she had been left traumatized by the test. She said another female colleague fainted from the pain.
The organization told CNN on Friday that this practice had since officially stopped on a national level.
The Ministry of Home Affairs, which used to engage in the practice, also stopped using it in 2014, Human Rights Watch researcher Andreas Harsono told CNN.
Harsono, who is based in the Indonesian capital, Jakarta, said there was a view among men that "easy women" should be barred from taking military and police roles.
"In general, women do oppose this practice more than men," he said, "although many victims prefer to remain quiet."
"Human Rights Watch and many women's rights groups in Indonesia will keep on pressuring the Navy and the Air Force to end the practice," he added.
CNN has reached out to the Indonesian army for comment.