The Christmas themed shopping and entertainment event was set to return to the Open Air Theatre this weekend after last year's event was cancelled due to the coronavirus pandemic.
Storm Arwen is set to bring winds of up to 75mph to the Yorkshire Coast and right through the Open Air Theatre during Friday and Saturday. The Met Office has issued an amber weather warning.
The event's organiser, Scarborough Council, said the decision was taken after the authority and stallholders raised concerns over the high safety risk to visitors and infrastructure.
Storm Arwen brings with it the risk of disruption to travel, power cuts and potential damage, especially within the amber area and near the coasts, where large waves could see material thrown on to coastal roads, sea fronts and properties.
Cllr Jim Grieve, Scarborough Borough Council, cabinet member for quality of life, said: "We’ve not this decision lightly and we’ve made it in full consultation with the many fantastic businesses that attend and support our event.
"The safety of everyone involved and their livelihoods must come first.
"Like us, we know many people will be disappointed that the event isn’t going ahead, but we look forward to returning, along with a much better weather forecast, in 2022."