Bound For Glory, an American “white power” band, were reportedly due to perform in Edinburgh at an undisclosed venue on Saturday October 22.
The event has been reported since January this year after a poster was temporarily released on Facebook showing tickets being sold in advance for £30.
However, anti-racism group Hope Not Hate said “the largest white power concert ever to take place in Scotland” has been cancelled.
The campaigners said that they had proof that the gig had been moved to an unknown venue in Falkirk and over 500 tickets have already been sold with “hardcore neo-nazis” expected to attend from places including England and Germany.
Earlier on Sunday, Scotland’s Cabinet Secretary for Justice, Michael Matheson, said that he was going to write to the Home Secretary Amber Rudd recommending she refuses the entry of the band to the UK.
Mr Matheson said: “The best approach would be to refuse this band entry to the UK and I will be writing to the Home Secretary to ask that she consider this.
“There is no place for hatred of this kind in Scotland.”
Hope Not Hate said in a statement on its website: “The Nazi gig in Falkirk has been cancelled. We have won.
“The announcement came a few minutes ago when the organiser, Vicky Pearson, threw in the towel and called off the event.
“Citing adverse media attention and the likelihood that the US band members would be refused entry into this country and the venue would cancel the gig, she broke the news to people who had bought tickets.
“This came shortly after the Scottish Justice Minister called on the Home Secretary to block entry to Bound for Glory band members.
“While obviously we will remain vigilant to ensure that she is true to her word, we can celebrate a huge victory for people power.”
A Police Scotland spokeswoman said earlier: “We will not tolerate any group that incites violence or hatred in our communities across Scotland.
“We are working with a range of organisations across the country to intervene and where possible, prevent any event that promotes extremist or racist views.”