The 18-year-old walked free from a Bali police station after being given the all clear less than 48 hours after he was arrested at a Kuta nightclub for carrying a white powder.
It's not clear when the teenager will leave Bali, but his lawyer Dessy Widiantari says it's most likely to be some time today.
He said nothing as he was led through the waiting press pack on Wednesday night and towards a silver car parked at the entrance of the police station in Kuta.
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Murphy's release on Wednesday brings to a close a tumultuous 45 hours for the teenager.
Having arrived in Bali on Sunday night with two friends celebrating graduation, the teenager was arrested at the nightclub Sky Garden just before 1am local time on Tuesday.
Police said he had been discovered around 1.6 grams of white powder they suspected was heroin or cocaine - an offence that carries with it a maximum of 12 years in prison.
But by Wednesday afternoon, they said test results of both the powder and the teenager's urine had come back negative.
Kuta police chief Wayan Sumara told reporters it was a mixture of painkillers, caffeine, cold and flu medication and cough medication.
It was the "first time" the police station had experienced negative results such as this, he added.
Australian Jamie Murphy (L) walks as he is released by Bali police at a Police station in Kuta, Bali, Indonesia, 23 November 2016 (AAP) Source: EPA
Describing Murphy as "very lucky", Chief Sumara said the teenager had bought it off a man on the street who told him it would "make him feel good".
"He wasn't sure at the time (what it was) ... He is a teenager. He wanted to know what it is."
"He then tried it in the room, he drank, mixed it together."
This made him feel nauseous, the policeman added.
Nevertheless, he then went out to Skygarden with his friends.
"I don't want to say whether he is stupid or not."
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Murphy's parents had flown to the island to offer their support but were not seen at the police station throughout the day.
It is understood the teenager has relatives in Bali.
His release came after Murphy's lawyer gave a different account of the events that led up to his arrest.
Ms Widiantari said the teenager denied buying the powder and did not know how the drugs got into his bum bag as he had been "half conscious" at the time.
Late on Wednesday, Sky Garden apologised for the "excessive force" used during his detainment.
They said the security involved in the teenager's detainment has been "reprimanded" and will not be permitted to return to work until completing further training.
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