The announcement came in the wake of advice from the federal government that all non-essential public gatherings of 500 people or more should not go ahead.

Blessing of the Fleet Festival chairperson Leonie Smith said this was the first time the event, the largest on Ulladulla's annual calendar, had been cancelled due to health concerns.

"It's very disappointing," Ms Smith said.

"It is an evolving situation that the Blessing of the Fleet Festival Committee have been monitoring and were advised today by NSW Government to cancel all non-essential gatherings of over 500 people.

"This will now see the cancellation of the Ulladulla Blessing of the Fleet Festival, the Rise of the Phoenix Big Day In and the two-week Ulladulla Phoenix Festival, which was set to take place from April 11-25, 2020," Ms Smith said.

Fireworks on Easter Sunday have also been cancelled.

Sponsors who have paid the Blessing of the Fleet Festival this year will get a refund.

At this stage the Blessing of the Fleet Princess Ball is to go ahead on March 28.

Ball Committee president Brian Morrison said it was important to maintain that special night for this year's entrants, their partners, sponsors and families.

However, the decision to go ahead with the ball might change in line with health advice.

This is a blow to the South Coast, which was pinning hopes on busy Easter traffic to make up for the disastrous summer, which saw bushfires decimate the annual tourist trade.

"It's the last thing local businesses need after the summer of the fires," Ms Smith said.

"I'm really concerned for the mental health of many residents who are already struggling to stay afloat with losses of 80 per cent over summer trade and the loss of properties.

"The Ulladulla Phoenix Festival was geared at building resilience among residents and boosting the local economy."

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