Wickham Horse Fair takes place on May 20 each year, having only been postponed before due to flu outbreaks, and attracts crowds of more than 1,000 people.
Market stalls, a funfair and travellers with horses normally descend on Wickham.
But it will now not take place next month, organisers have said.
Bernice Wall, from John Wall & Son Fun Fairs and who organises the market stalls, told The News the decision had not been taken lightly.
She said: ‘It’s only cancelled when absolutely necessary and this year is a necessity that it's cancelled.
‘But we will be back against next year, everyone will come back with a new and committed attitude to coming to the fair and enjoying themselves.
‘It’s just sad that this is one of the many things that has unfortunately been affected . There have been many event ups and down the country, and the world.’
The fair traces its origins back to when Roger De Syres obtained a royal charter from King Henry III to have a weekly market in 1269.
Over the years this morphed into an annual fair.
Bernice, who is based in Farnborough and whose firm holds the charter rights to fairs across the county, said: ‘The charter can lapse under extreme situations like this and it’s not a problem. The charter will carry on.’
But traders, travellers and other firms are likely to lose out – not only from the fun of the event but also financially.
‘We hope everyone understands that the decision wasn’t taken lightly, and people will see that we’re doing out best to keep the community safe and that’s the reason why we took the decision,' she said.
Each year Hampshire County Council and Winchester City Council manage traffic, with many shut off in the village.
There is always a police presence, alongside welfare charity the RSPCA.
A statement from Supt Alison Heydari of Hampshire police said: ‘This year’s Wickham Horse Fair has been cancelled, due to government directives following the coronavirus outbreak.
‘We all need to play our part in stopping the spread of this infection and saving the lives of others, so unfortunately this year’s event cannot take place.’
It added: ‘The decision was taken following consultation between representatives from the event and local authorities, including Hampshire Constabulary, Winchester City Council and Hampshire County Council.’