Posting on social media, organisers said that with increasing risks, they had a duty of care to both residents and tourists to keep people safe.
The annual extravagansa is always a popular draw for tourists, with people travelling from the UK and across the world to witness the spectacular event.
The streets are lined with people as a parade makes its way through town with upto 40 men and women swinging fireballs in the air to see in the New Year.
The post, by The Stonehaven Fireballs, said: “This is not a post we wanted to be writing, but unfortunately this year’s Fireballs ceremony is now cancelled.
“We’re sure you will all be aware of the reports of Covid case increases and the new recommendations around social distancing issued by the Scottish Government in the last few days.
“Whilst there are no fresh guidelines around events such as ours (yet), we feel that it just would not be right to run at this point.
“We are so proud of Stonehaven and of the Fireballs Ceremony, but we also feel we have a duty of care to the town’s residents (and in particular those in the auld toon) to not expose them to any more risk than necessary.
"They put up with so much from us under ‘normal’ circumstances.”
Organisers added that they hope to return with the event next year.
“We need to say a massive thank you to Aberdeenshire Council (all departments involved), Police Scotland and the Fire Service for all their help & encouragement in getting the event planned and green-lighted in the first place. We know they are as disappointed as the rest of us.
“It’s frustrating to have to make this decision so soon after announcing that it was on in the first place.”
The post added: “Here’s to celebrating properly next year! We’re as gutted as you guys.
To the public who were looking forward to joining us to welcome in the New Year: sad times again for 2021/22, but we will be back again for sure to celebrate Hogmanay in true Stonehaven style!!”