Premier Steven Marshall says the Royal Adelaide Show, scheduled for next month, has been cancelled.
At a press conference on Thursday morning, Mr Marshall said the decision was made with "huge regret" because of the current level of coronavirus restrictions in the state.
"These mass events are extraordinarily difficult," he said.
"I know there'll be so many people that are disappointed."
It is the second year in a row that the annual event has been cancelled.
Mr Marshall said crowd numbers were an issue, as was the inability of show ride operators to travel from other states.
"Crowd numbers are one issue, but also many of the attractions — the rides — come in from interstate.
"We've got really difficult border restrictions, right around the country really at the moment, and that was just not going to facilitate it for this year."
Numbers too low to make event viable, organisers say
In a statement, the Royal Agricultural and Horticultural Society of SA said that the "significantly limited" number of people permitted at mass gatherings meant that running the event in 2021 would not be viable.
"As you would appreciate, this figure is not feasible therefore the 2021 Royal Show cannot proceed."
The Royal Adelaide Show is the state's largest event, and normally attracts more than 50,000 people each day, as well as "up to 10,000" people working or competing daily.
The society said in a normal year, the event contributed more than $170 million in value to the South Australian economy.
Impact on businesses and charities
Royal Agricultural and Horticultural Society chief executive John Rothwell said the late cancellation would have a major impact on exhibitors and the wider community.
"We were happy to work with reduced numbers maybe in the order of 25,000 or even 20,000, but that's not going to be approved, so it became clear that that determination from SA Health meant the show had to be cancelled," he said.
The Country Women's Association runs a popular cafe at the show, selling its famous scones with jam and cream.
State president Davina Quirke said hundreds of kilograms of jam had already been made for the event but, luckily, the organisation had held off ordering scone mix and cream for the stall.
"It's taken the wind out of our sails," she said.
"We were so prepared and getting prepared for all the work that was going on."
SA's Chief Public Health Officer Nicola Spurrier said SA Health had been "walking hand-in-hand" with the show society to investigate ways to conduct the event safely.
"Unfortunately, with the pandemic, things can change — it's very unpredictable.
"Suffice to say, I personally feel really disappointed — it's an iconic activity here in South Australia."
South Australia recorded no new COVID-19 cases on Thursday.
