The annual event draws thousands of people to the town from across a wide area for a day of fun and entertainment ending in the switching on of the Christmas lights and a spectacular fireworks display.
Hundreds of pounds is also regularly raised for local charities of the Welsh Air Ambulance.
The group that organises the festival now says that having considered the risks they have reluctantly decided to cancel this year’s event.
In a statement it said: “We feel it would be unrealistic and irresponsible for us to organise a festival that attracts over 2,000 people into town, with little chance of social distancing, whilst coronavirus is still a threat.
"We are hoping that we’ll be able to organise some smaller Christmas activities during December but it will obviously be dependant upon the coronavirus advice at the time.
“We will be back and our plan is for Llangollen Christmas Festival 2021 to be the biggest and best ever."