Organisers said they had spent months exploring alternative options for staging the event, including reducing the size of the festival footprint and revising programmes.
However, the board said rising costs linked to infrastructure, safety management, staffing and financial resources had created a “significant funding gap”.
“Despite considerable work to reduce costs and reshape the model, as a board we have ultimately reached the conclusion that delivering a full-scale carnival in 2026 is not viable,” they said.
“Our responsibility must always be to protect the safety of the public, volunteers, artists, traders, staff and everyone involved in bringing Carnival to life.”