Community leaders have decided to ditch the controversial three-day festival and will be putting on four smaller events spread throughout the year.
The events will be called 'festival markets' and will have up to 40 stalls selling goods in South Street car park.
The food festival was cancelled this year after complaints that it had become a victim of its own success with more than 50,000 visitors descending on Emsworth and effectively closing the village centre for three days.
But it still remained uncertain whether the festival would make a return next year.
However, following a crunch meeting between Emsworth Business Association and the Food Festival Committee, it has been decided to scrap the idea of having a large food festival once a year.
Brendan Gibb-Gray, chairman of Emsworth Business Association, said: 'I think it is a very exciting idea.
'We have looked at Winchester and Chichester and Petersfield and we feel this is an opportunity to take the best of the Emsworth Food Festival and get as many local businesses involved as possible.
'We are trying to make it a more contained event and hopefully minimise disruption to the rest of the town.'
The markets will incorporate businesses in Emsworth after complaints that the festival was not benefiting local traders. All businesses in Emsworth will now be given the opportunity to set up a stall.
The main theme will still be food, but other goods will be on sale, including gifts, books and crafts.
Organisers say the event will still have a 'festival theme' as there will still be street entertainment and cookery demonstrations.
The first festival market will take place on Sunday December 14 and will have a Christmas theme.
Mr Gibb-Gray said: 'There are lots of economic reasons that say the food festival would be a difficult financial proposition at the moment.
'It would be difficult at the moment to make it financially viable.'
But he added: 'It's not goodbye to the food festival. It's hello it's back, but it is in a different format.
'Nevertheless it will be the best of the Emsworth Food Festival.'