Ambuhl, a 30-year-old reservist from Centreville, Virginia, was reduced in rank to private and ordered to forfeit half a month's pay, army spokeswoman Lieutenant-Colonel Pamela Hart said on Wednesday.
She became the third soldier from the army's 372nd Military Police Company to plead guilty to charges stemming from the abuse at the notorious Abu Ghraib prison.
She was the first of the three soldiers to be spared prison time. A fourth soldier from an army military intelligence unit has also pleaded guilty.
Ambuhl entered her plea on Saturday at a summary court martial in Baghdad to a charge of dereliction of duty, taking responsibility for failing to stop or report abuse of prisoners by other US soldiers, according to the army and Ambuhl's lawyers.
Under her agreement with prosecutors, they dropped charges of conspiracy, maltreatment of detainees and indecent acts. She would have faced up to 7 1/2 years in prison if convicted of the more serious charges.
A military criminal investigation was launched when a soldier in January informed the US military chain of command in Iraq of physical and sexual abuse of Iraqi prisoners at Abu Ghraib.
The scandal erupted in April when photographs of US soldiers taunting and humiliating naked prisoners became public, sparking worldwide condemnation.