Proper indentation for multiline strings?

What is the proper indentation for Python multiline strings within a function?

    def method():
        string = """line one
line two
line three"""

or

    def method():
        string = """line one
        line two
        line three"""

or something else?

It looks kind of weird to have the string hanging outside the function in the first example.

You probably want to line up with the """

def foo():
    string = """line one
             line two
             line three"""

Since the newlines and spaces are included in the string itself, you will have to postprocess it. If you don't want to do that and you have a whole lot of text, you might want to store it separately in a text file. If a text file does not work well for your application and you don't want to postprocess, I'd probably go with

def foo():
    string = ("this is an "
              "implicitly joined "
              "string")

If you want to postprocess a multiline string to trim out the parts you don't need, you should consider the textwrap module or the technique for postprocessing docstrings presented in PEP 257:

def trim(docstring):
    import sys
    if not docstring:
        return ''
    # Convert tabs to spaces (following the normal Python rules)
    # and split into a list of lines:
    lines = docstring.expandtabs().splitlines()
    # Determine minimum indentation (first line doesn't count):
    indent = sys.maxint
    for line in lines[1:]:
        stripped = line.lstrip()
        if stripped:
            indent = min(indent, len(line) - len(stripped))
    # Remove indentation (first line is special):
    trimmed = [lines[0].strip()]
    if indent < sys.maxint:
        for line in lines[1:]:
            trimmed.append(line[indent:].rstrip())
    # Strip off trailing and leading blank lines:
    while trimmed and not trimmed[-1]:
        trimmed.pop()
    while trimmed and not trimmed[0]:
        trimmed.pop(0)
    # Return a single string:
    return '\n'.join(trimmed)