Organisers say they are planning for the three-week event to take place as normal, but may be forced to scrap the three-week event as a result of a "government directive" on public events or gatherings.
First Minister Nicola Sturgeon announced on Thursday that all “large gatherings” for more than 500 people which potentially impact on the emergency services should be cancelled from Monday. No timescale has been given indicating how long the restriction will be in place for.
More than three million tickets were sold for shows at last year’s Fringe. The attracts tens of thousands of people onto the Royal Mile every day for free street theatre performances.
Behind-the-scenes talks have already been held with government officials to try to "limit the financial impact" of a complete cancellation.
The Edinburgh Festival Fringe Society said it was "optimistic" that the event would be able to go ahead as normal this August, but admitted: "So much is still unknown."
The society has revealed that companies and venues who are planning to take shows to this year's Fringe the chance to "roll" their programme registration on to the 2021 event.
Fringe Society chief executive Shona McCarthy said: "We are living through strange and unprecedented times and trying to find our way, keep people safe and do the right thing with the resources we have on a daily basis.
"Amidst it all, it gives heart and hope to see companies and artists and venues continue to register their shows and plan for another joyous creative gathering in August.
"I completely understand and feel the uncertainties of the current situation for artists and audiences alike.
"We want to give reassurance to participants that the society will do everything in its power to support those that help make the Fringe happen each year.
“We are monitoring the coronavirus outbreak closely, taking guidance from both the UK and Scottish Governments.
"Our current position is to plan for the Fringe in August as normal, but with an eye to an ever-changing environment.
"The health and safety of Fringe participants, audiences and staff is – and always will be – our top priority and we will update participants and stakeholders of any changes.
“So much is still unknown, but with the Fringe still five months away, we remain optimistic that the festival will continue as usual in August.
"Over the next few weeks, we will be continuing our planning and day-to-day operations in line with the latest advice and recommendations. This includes limiting travel and digitising events where possible.
“Were the situation to dramatically change and the Fringe in its entirety had to be cancelled (through a government directive on public events or gatherings in August), we will work with our insurers, government stakeholders and – most importantly – our participants to limit the financial impact across the whole Fringe as much as we possibly can.
"We would also offer participants who have already paid the opportunity to roll their show registration forward to the 2021 Fringe to cover an equivalent show listing.
"We are aware that the current situation is difficult for everyone involved and we want to encourage participants to keep talking to us.
"If ever there was a time for working together with empathy, humanity and mutual understanding, this is it. So let’s keep talking and doing our best to weather this together."
Announcing the curb on large events, Ms Sturgeon said: “Event organisers should take action now to help our emergency services deal with the scale of the challenge we face with coronavirus.
“We know that certain events have an impact on our policing and frontline health services.
“Our health services in particularly will be under acute pressure in the weeks and months to come. I think it is incumbent on the government to do what we can do remove unnecessary burdens on our public services.”