Arema FC supporters at the Kanjuruhan stadium in the eastern city of Malang stormed the pitch late on Saturday after their team lost 3-2 to Persebaya Surabaya, the first loss in more than two decades to their bitter rival.
Police, who characterized the unrest as "riots," tried to persuade fans to return to the stands and fired tear gas after two officers were killed.
Many of the victims were trampled to death, according to police.
"In the incident, 127 people died, two of whom are police officers. Thirty-four people died inside the stadium and the rest died in hospital," East Java police chief Nico Afinta said in a statement on Sunday.
Afinta said many people were crushed and suffocated when they ran to one exit.
Images captured from inside the stadium during the stampede showed huge amounts of tear gas and people clambering over fences.
People were carrying injured spectators through the chaos.
Torched vehicles, including a police truck, littered the streets outside the stadium on Sunday morning.
The Indonesian government apologized for the incident and promised to investigate the circumstances surrounding the stampede.
"We're sorry for this incident... this is a regrettable incident that 'injures' our football at a time when supporters can watch football matches from the stadium," Indonesian Sports and Youth Minister Zainudin Amali told broadcaster Kompas.
"We will thoroughly evaluate the organization of the match and the attendance of supporters. Will we return to banning supporters from attending the matches? That is what we will discuss," the minister added.
The Football Association of Indonesia (PSSI) suspended football matches for one week, banned Arema FC from hosting home games for the rest of the season, and said it would send an investigation team to Malang to establish the cause of the crush.
"We're sorry and apologies to families of the victims and all parties over the incident," PSSI chairman Mochamad Iriawan said.
Fan violence is a problem in Indonesia, where deep rivalries have preciously turned into deadly confrontations.
Some matches -- the biggest being the Old Indonesia Derby between Persija Jakarta and Persib Bandung -- are so heated players from top teams have to travel to away games under heavy protection.
Source: AFP#Indonesia 22-10-02
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