They have also cited funding problems for the demise of LeithLate, which saw pop-up events staged in cafes, bars, shops and empty buildings on and around Leith Walk.
The event, which has cost up to Â£15,000 to stage in recent years, is said to have becoming "increasingly unsustainable" due a lack of resources and uncertainty over future funding.
Its cancellation has been announced days after it emerged that a live music venue on Leith Walk is facing demolition to make way for a student housing and hotel development. Leith Depot has bought over by a property developer which claims its plans offer "a major opportunity to revitalise an important part of the city."
The festival, which was turned down for Creative Scotland funding last year, has been cancelled despite the cultural scene in the area being given a significant boost with the return of the Edinburgh International Festival to Leith Theatre after a 30-year hiatus. Django Django, Mogwai, King Creosote, Karine Polwart, Anna Meredith, The Pastels and Lau were unveiled in the line-up last night.
However organisers of LeithLate said there was a danger that current changes in the area were threatening "what makes Leith creative in the first place."
The event started off as a one-off "art crawl" in 2011 and grew to become a four-day festival featuring live music events, exhibitions, visual art installations, debates and walking trails.
LeithLate events were staged in old ambulance depot, a launderette, a former police box, a library and a Chinese supermarket.
A statement posted by LeithLate said: "The LeithLate festival has provided a much-needed platform for artists and support for local businesses and brought the local and wider communities of Leith together in a unique celebration of our place.
"However - much as it saddens us to say - the delivery of an annual festival of this quality, energy and ambition has become unsustainable with current resources. Consequently, the LeithLate festival will not be taking place this year.
"Leith remains an ongoing site of transition. Increased development and rising property prices should not be prioritised over investment in Leith’s culture and identity.
We would like to thank all our amazing collaborators, venues, volunteers, the hundreds of participating artists and thousands of audience members who helped us grow from a one-night only grassroots in 2011 with no backing - to a vibrant 4-day multi arts festival in the mighty republic of Leith.
"Our belief in Leith's cultural significance is unwavering. We remain active in Leith through our work and that of sister project Leith Creative."
LeithLate founder Morvern Cunningham added: "Fundraising on a project to project basis annually can take its toll, and particularly for a grassroots organisation like ours.
"Limited capacity and resources can serve to undermine our scope and ambition year on year. It's hard to make such a thing as LeithLate sustainable in the current funding climate (even though we generated over half our income ourselves), and we were starting to push ourselves and the festival beyond our limits and risked compromising both the quality and spirit of LeithLate. There are a number of external contributing factors too.
"Increasing development and rising property prices are starting to drive change in the area. We now have a Starbucks on Leith Walk (something I thought I'd never see) and the whole former railway block that houses Leith Depot (among other community assets) is under threat of demolition to make way for student flats.
"We need time to question ourselves what the purpose of LeithLate is in an environment such as this.
"I think it's a good thing for Leith that the Edinburgh International Festival is coming to Leith Theatre, as there is the possibility of ongoing legacy and necessary investment into the theatre in order to make it a fully functioning performance space for the people of Leith and Edinburgh to enjoy all year round.
"However, it's also important there be strategic investment into Leith's existing local culture and identity, or we might start to see the loss of what makes Leith creative in the first place."