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The 37-year-old faced a long stretch behind bars after being found with a half-smoked cannabis joint in her handbag when police raided a holiday villa in north Kuta in February.
Instead, prosecutors have recommended Ormsby be treated as an addict in the eyes of the court, meaning she will be given some leniency, news.com.au said.
She had earlier told the Denpasar District Court that she had a history of drug abuse and rehabilitation attempts.
Prosecutor Luh Oka Ariani told the court Ormsby was guilty of possessing drugs, and under narcotics law drug addicts should be sentenced to 15-months jail for such a conviction.
Three judges will decide the fate of the New Zealander, who was living in Sydney at the time of her arrest. She will be sentenced next week.
Ormsby was charged after police found MDMA and hashish in a drawer inside the villa, which she was about to unlock.
Ormsby had not been staying at the villa, but had been given the key by Australian DJ Marco Mazzucco, who was also on holiday in Bali. Mr Mazzucco had been given the keys by Sydney musician Azaria Byrne, who had rented the villa for three nights, but left early.
Both have denied knowing about any drugs in the villa.
- Patrice Dougan of APNZ