Basuki Tjahaja Purnama lost out to Muslim rival and former education minister Anies Baswedan in a run-off election in the Indonesian capital on Wednesday.
Purnama learned on Thursday that prosecutors believe he should be placed on probation for two years, with a potential one-year jail sentence if he commits a crime during that time period.
The recommended penalty, which is lighter than expected, comes after a lengthy trial over claims Mr Purnama insulted Islam when he quoted a passage from the Koran.
He suggested that his opponents had employed a verse from the Islamic holy text to wrongly convince people against voting for him - a non-Muslim.
A subsequent protest brought hundreds of thousands of people to the street. Mr Purnama later apologised.
Chief prosecutor, Ali Mukartono, said the recommended sentence reflected good behaviour during his trial and his contribution to Jakarta.
Prior to the controversy, Mr Purnama had experience a strong lead in the opinion polls.
His lawyer, Wayan Sudirta, told AFP: "If within the two years, Ahok doesn't commit any new criminal act, like corruption, stealing... he will be free.
"If within that two years he does commit a criminal act, he has to serve the one-year jail sentence."
In the Indonesian legal system, a sentence recommendation is a typical procedure which is normally followed by a verdict within weeks.