Jokowi, as the president is known, said in a broadcast the action was taken to improve governance and transparency in the rich natural resources sector.
The permits revoked include 1,776 in metals and minerals mining, 302 in coal mining, as well as in forestry and plantations that cover more than three million hectares of land, spread across the archipelago.
"Permits that are not used, not productive, transferred to other parties and those that do not fit the required purposes are revoked," Jokowi said.
The president did not disclose any of the holders of the permits.
The government will offer a chance for farmers and civil society organisations to manage some of the assets by partnering with companies, he said, adding that the country will be open to "investors that are credible."