Organisers said they were worried about the new Indian variant in the area and so called off the funfair event planned at Newport Rugby Club this weekend.
Newport Rugby Club was hoping to lift the spirits of the local community as restrictions eased by putting on a weekend event with a funfair, live music and rugby for guests.
It was to be held this weekend from Friday to Sunday.
However, today bosses at the club said they are postponing the event until further notice.
Earlier this week, Shropshire Council confirmed two cases within the authority area, with a 'small number' of cases also being confirmed at Burton Borough School in Newport.
Telford & Wrekin Council and Public Health England said they are working 'closely' with the school in light of the development and have asked all families with children in the Newport area to get tested.
They added that all the positive cases are currently self-isolating and extended contact tracing is taking place to identify their contacts.
A statement from the organisers said: "Due the nature of funfairs and the attendees being predominantly children we have decided to postpone this event to a later date in light of the locally report coronavirus outbreak of the new variant.
"I know this will come as a massive disappointment to many but we believe is the responsible action to take at this time.
"I want to take this opportunity publicly to also thank the fairground operators for working with us on this unforeseen situation, I know this is a great disappointment for them also."
A testing centre is open in Newport at Shuker Playing Fields, Sports and Social Club, Barnmeadow Road, TF10 7TP, from 11am to 6pm Monday to Friday, and 9am to 3pm over the weekends.
No appointment is needed.