Correct spelling


Correct spelling, explanation: this is the only correct form according to the dictionaries. The adverb is based on the adjective ideal with an added adverb suffix -ly. Ideally requires the double l for the sake of consistency. As a rule, the l is doubled whenever the suffix ly is added to a word ending with an l (like peaceful → peacefully, or usual → usually).

Definition of ideally:
1. in a perfect situation
2. perfectly, flawlessly
Ideally, we could finish the job in one day but we may need more time.
It turned out that my red dress was ideally suited for this party.

Incorrect spelling


Incorrect spelling, explanation: this form (idealy) is incorrect, as it lacks one l, which would mean it was cut either from the stem word ideal or from the suffix -ly, which is incorrect. In cases of adverbs made from adjectives ending with an l, a double l is necessary.