News of the deadline is the latest in a long line of headlines created by the PSSI's decision to disband the rogue ISL and replace it with the Indonesian Premier League (IPL). As a result, 18 clubs rebelled and duly revived the ISL.
In the letter dated December 21, both FIFA, and the Asian Football Confederation (AFC) have now warned the PSSI that if the deadline is not met, the country will face severe consequences.
"Should the situation not be resolved by 20 March 2012, we will have no other choice but to report the case of the PSSI to the FIFA Associations Committee for review and possible sanction," the letter stated.
FIFA also warned that players in the ISL would be ineligible to play for their respective national teams.
PSSI spokesman Edi Elison has confirmed that they had received the letter and said a response would be swift.
"The executive committee will discuss the letter and arrive at the best way to resolve the problem," he told the Jakarta Globe.
Joko Driyono, chief executive of Liga Indonesia, the ISL's administrator, said they would wait and see what decision the PSSI would take.
"In the letter, FIFA tells the PSSI to find 'an amicable solution to the current situation for the common good of Indonesian football,' " he said.
"We want to see how the PSSI will define that."