import xml.dom.minidom

dom = xml.dom.minidom.parse(xml_fname) # or xml.dom.minidom.parseString(xml_string)
pretty_xml_as_string = dom.toprettyxml()

Here's how to parse from a text string to the lxml structured data type.

Python 2:

from lxml import etree
xml_str = "<parent><child>text</child><child>other text</child></parent>"
root = etree.fromstring(xml_str)
print etree.tostring(root, pretty_print=True)

Python 3:

from lxml import etree
xml_str = "<parent><child>text</child><child>other text</child></parent>"
root = etree.fromstring(xml_str)
print(etree.tostring(root, pretty_print=True).decode())

Outputs:

<parent>
  <child>text</child>
  <child>other text</child>
</parent>

I simply solved it with the indent() function:

xml.etree.ElementTree.indent(tree, space=" ", level=0) Appends whitespace to the subtree to indent the tree visually. This can be used to generate pretty-printed XML output. tree can be an Element or ElementTree. space is the whitespace string that will be inserted for each indentation level, two space characters by default. For indenting partial subtrees inside of an already indented tree, pass the initial indentation level as level.

tree = ET.ElementTree(root)
ET.indent(tree, space="\t", level=0)
tree.write(file_name, encoding="utf-8")

Note, the indent() function was added in Python 3.9.

You can use the function toprettyxml() from xml.dom.minidom in order to do that:

def prettify(elem):
    """Return a pretty-printed XML string for the Element.
    """
    rough_string = ElementTree.tostring(elem, 'utf-8')
    reparsed = minidom.parseString(rough_string)
    return reparsed.toprettyxml(indent="\t")

The idea is to print your Element in a string, parse it using minidom and convert it again in XML using the toprettyxml function.

Source: http://pymotw.com/2/xml/etree/ElementTree/create.html