The singer was to have performed a DJ set at the two-day event on August 16.
But a commitment made by her record label to shoot a video has meant that the singer has cancelled her appearance.
A host of other well-known names will be at the festival at the Oswestry Showground, including Union J and Luke Friend, Foxes and the Hoisiers and stars of the past Toyah and the Bay City Rollers. In a statement, on the music festival website, Osfest said "We are very sorry to announce that Paloma Faith has had to cancel her DJ Set at OsFest on Saturday 9th August.
"We have done everything possible to try and reverse this decision but this has been out of OsFest's control. We are naturally disappointed and apologise for any convenience that this causes."
The star's solicitors, SSB solictors said: "Paloma apologies for letting you down on this occasion and emphasises that is it for reasons beyond her control. Paloma is unable to attend due to a commitment that her record label took on her behalf, without her knowledge, prior to the Osfest booking being contracted.
"She personally attaches huge importance to honouring her obligations, particularly to independent organisations such as yours. Her team tried to shift the the video dates but were unsuccessful."