Organisers had hoped to run the Newport Food Frenzy, an annual food extravaganza in the market town's historic centre, later this month.
It was announced as recently as June that the event could go ahead with about 50 food and drink stalls around the High Street, St Mary's Street and Lower Bar, depending on developments in the coronavirus crisis.
But organisers have now taken the decision to defer the 2020 event, following advice from the borough council.
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Mike Atherton announced the decision to supporters in a post on social media, saying: "This decision has been made following advice/guidance provided by Telford & Wrekin Council in an email.
"All traders have been informed of the cancellation with an option of carrying forward their pitch fee to a future event or receiving a full reimbursement.
"On a brighter note, work has now started on planning for next year's event."
Town mayor Peter Scott said it was "sad news" and that he was "very disappointed for all concerned".