For the first time in its 44-year history, the Port Fairy Folk Festival will not be held in 2021 due to the coronavirus pandemic.
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Festival president John Young said the decision was finalised by the committee on Thursday night.
"It's very much a heartbreaking and agonising decision, we've never had to do anything, nor imagined we would have to do anything like this," he said.
"We set ourselves a timeline of when to make a decision and we've been working on this for two weeks. We came to the point of saying we've got to do this.
"It's a different world, this virus is affecting us in every way imaginable."
Almost 9000 revellers attended the 2020 Folk Festival and Mr Young said this number of people would be near-impossible to keep safe throughout the March event.
The committee researched many alternatives including a shorter festival in an effort to ensure the continuation of the event, but there was no way the festival could continue in a viable way.
"We were anguishing about what we could do and every avenue we pushed up started to close," Mr Young said.
"It just started to get too frustrating.
"As you would expect, when I go out to the post office, supermarket, the butcher or wherever, people would stop me in the street and asking 'how are you going to put on a festival? You won't be able to do it'.
"And all the committee was getting this and it was incredibly difficult to answer in a meaningful way.
"We thought we had to be definite about this and come to a decision so that's what we did."
The Port Fairy Folk Festival injects a large amount of money back into the community through funding initiatives.
Some of the 2020 money was distributed to the Port Fairy Cricket Club, the Adventure Film Festival and the town's community house and Mr Young said the committee would make a decision on additional funds available at a later date.
The date has been set for the 2022 Port Fairy Folk Festival over the March 11-14 long weekend and the festival committee believes it can positively bounce back from the postponement.
"When the health authorities give the all clear and we can go back to some level of normality, we will be prepared with the best festival we can possibly put on," Mr Young said.
"Nobody knows how long this will go for at the scale it is with the restrictions in place.
"If things did change to some extent before March, we may be able to come forward with some small activities or we're looking at (live) streaming acts (online). But it's all up in the air and it's a bit hard to be definite about it.
"I hope the community is understanding, we've agonised over this, it really has been difficult and it's not something we're relieved about.
"It's very disappointing but we felt we had no alternative and felt it would be quite risky to continue to plan and give people the expectation that there was going to be something along the lines of previous festivals next March."
Newly appointed festival director Justin Rudge had been looking forward to his first event in the role, but is putting his energy into focusing on the 2022 instalment.
"After months of analysis, investigation and discussion, the final decision was that the public health and safety of the community, patrons, artists, employees, contractors and other stake holders was paramount," he said. "Any risk associated to their health and wellbeing was our primary concern.
"Obviously it's a really disappointing time for everyone. But I am equally excited about the long term future of the festival, and look forward to many successful events in the years ahead."
Mr Rudge is currently based in Madrid, Spain, with his family and has been using video conferencing to attend committee meetings.
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In light of the decision to postpone the 2021 event, Mr Rudge is hopeful the 2022 event will have an added layer of appeal for the community who attend year-in, year-out, with some preparations already underway.
"While our short term focus has been the practicalities around an event in March 2021, we have already had preliminary discussions about how we can make the 2022 event the best celebration of music and culture possible," he said.
"We are looking forward to working through these in the coming months, and sharing our plans with our loyal audience as we progress.
"Like everyone, we hope that the world has overcome this pandemic and that we can return to large-scale cultural events like Port Fairy Folk Festival that are loved by so many."
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