Central Coast Council has cancelled the Flavours by the Sea event at The Entance this Saturday.
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"In light of the advice from the Australian Government regarding COVID-19, Central Coast Council has made the difficult decision to cancel Flavours by the Sea," council said in a statement.
Council said it was implementing all federal and state government requirements during the coronavirus pandemic and would assist NSW Health in sharing critical information to the community.
"This decision was not made lightly, however council's core priority is the health and wellbeing of the Central Coast community.
"Council understands that this necessary decision will be disappointing to many people and apologises for any inconvenience caused by the cancellation of Flavours by the Sea."
Council said it would review other upcoming events that it planned to host, and would provide regular updates as further information became available.
Council had described Flavours by the Sea as the region's "premier multicultural event".
The event was to embrace the "everyone belongs" message of Harmony Day by showcasing music, art, cultural features and food from across the world in a "joyous event".
About 4,000 people enjoyed Flavours by the Sea in 2018.
A similar crowd was expected for the event on Saturday - before COVID-19 concerns grew.