An Australian woman has escaped the death penalty after being found not guilty of drug trafficking charges in Malaysia.

Judge Dato Ghazali found Maria Exposto was duped into carrying drugs through Kuala Lumpur International Airport in 2014.

Customs officers found 1.1 kilograms of crystal methamphetamine stitched into the lining of a bag that had been given to her by an online boyfriend, a man claiming to be "Captain Daniel Smith" from the US Special Forces.

The judge found Ms Exposto had genuinely fallen in love with the man, who groomed her over two years before she was flown to Shanghai and handed a bag containing drugs and asked to take it to Australia.

The mother of four was en route to Melbourne from Shanghai when the drugs were discovered.

She did not know the drugs were there and even volunteered that her bag be scanned through an airport X-ray machine.

"The court believes the testimony of Maria in that she was an innocent carrier," Ms Exposto's lawyer Tan Sri Shafee Abdullah said.

"She was tricked into carrying the bag because of what we now call the internet scam, internet romance.

Ms Exposto's lawyer, Muhammad Shafee Abdullah, speaks to media following the verdict. ( ABC News: Phil Hemingway )

"She did not have to go through the immigration but she followed everybody and she went through the immigration — bearing in mind she was only a transit passenger."

Prosecutors to challenge ruling

However, Ms Exposto will not be allowed to return to Australia, as prosecutors will lodge an appeal against the verdict.

She will be required to remain in Malaysia for several months until the appeal is heard.

Justice Dato Ghazali said she had genuinely fallen in love with a man who claimed to be a US Special Forces soldier and groomed her over two years before she was flown to Shanghai and handed a bag containing drugs.

If convicted Ms Exposto would have been sentenced to death.

Malaysian MPs have voted to end the nation's mandatory death penalty for drug trafficking but the changes have not yet been enacted.