Hungary, which has a population of nearly 10 million people, has reported 312 deaths from Covid-19.
As part of the fight to curb the spread of the pandemic, Viktor Orban’s government has banned any event involving more than 500 spectators until 15 August - the date of the race.
"It has now become clear that we cannot hold the 35th Formula 1 Hungarian Grand Prix in front of spectators despite all our efforts," a statement from race organisers said.
"We will continue to work with the international promoter to find the best possible solution," the statement added.
Reconfigured season
On Monday, the French Grand Prix was cancelled. The race on 28 June at Le Castellet had been targeted as the launch pad for a 2020 season that should have started on 15 March at the Australian Grand Prix.
Instead there have been postponements or outright cancellations as the death toll from the coronavirus has risen to more than 230,000 throughout the world.
The Austrian Grand Prix on 5 July, which should have been the 11th race of the 23 event campaign, has been reset as the start of the season.
Organisers concede that will take place without spectators. However the final clearance depends on whether the Austrian government accepts F1’s revamped health and safety plan for the Red Bull Ring in Spielberg.
The British Grand Prix at Silverstone on 19 July will also take place without fans.
"We're targeting a start to racing in Europe through July, August and beginning of September, said Formula 1 boss Chase Carey said.
"September, October and November, would see us race in Eurasia, Asia and the Americas,” he added.
At least eight races are necessary for a season to be validated and Formula 1 chiefs have mooted extending the 2020 season into 2021 in order to achieve that tally.
