Organisers mentioned the financial difficulty the festival would face, should it commit to running only for it to be cancelled last minute.
They said the move is to ensure the festival's ongoing sustainability.
The Birregurra Festival and Art Show Facebook Page posted on Wednesday, saying "some sad news folks. Due to the current escalating COVID-19 delta strain situation and likelihood of it impacting the rest of the year, it's with a very heavy heart that the festival committee have made the difficult decision to once again cancel the event."
"It's not an easy decision by any means however to ensure the ongoing sustainability of the festival we have had to call it before we have to make some significant financial commitments," the post read.
"We will still run our annual raffle to help us fund next year's festival and are looking to also run a range of smaller events over summer when it's safe to do so."
Organisers confirmed the Birregurra Art Show will still proceed at this stage.