BALI: An American woman convicted in her mother's "suitcase murder" in Indonesia has given custody of her young daughter to an Australian woman until her release from prison.

Heather Mack broke down in tears as she gave 2-year-old Stella Schaefer to Oshar Putu Melody Suartama on Friday at Bali's Kerobokan prison.

The baby girl was born shortly before her parents were convicted in the 2015 killing of Mack's mother, Sheila von Wiese-Mack. Under Indonesian law, the baby was allowed to live with her mother in her prison cell until she turned 2 years old.

Prison chief Tony Nainggolan said the girl's development will be supervised by government social workers. Mack is serving a 10-year sentence for assisting in her mother's murder, in which the body was stuffed in a suitcase.