The Pasadena, California, Tournament of Roses Association said the decision was put off until organizers were certain that safety restrictions would prevent staging of the 132nd parade.
Planning for the Rose Bowl college football game that traditionally follows the parade is continuing, the association said.
The parade is held every Jan. 1 except when New Year's Day falls on a Sunday and the event is pushed to Jan. 2.
Since its inception in 1891, the parade has only not occurred during the wartime years of 1942, 1943 and 1945, the association said.
"The health and well-being of our parade participants and guests, as well as that of our volunteer members, professional staff and partners, is our number one priority," Bob Miller, the 2021 president of the association, said in a statement.
The event is people-intensive, starting with hundreds of members of the association.
Thousands of spectators normally jam the 5-mile (8-kilometer) parade route through Pasadena, some camping out overnight on sidewalks to ensure a good view.
For days ahead of time, volunteers work to decorate the flower-laden floats that are the trademark of the parade.
There are also marching bands from across the nation and around the world and equestrian units that not only take part in the parade but in other events.
The association said a feasibility report by public health experts from the University of Southern California's Keck School of Medicine found that even with intensive efforts to ensure social distancing and use of face coverings the event would be a high-risk environment for spread of the virus.
It noted that many attendees would be in high-risk groups such as older people and that national and international travel could cause two-way transmission of infections.
Preparation for each parade normally begins during the preceding February.
"In addition to the advance planning required by our band and equestrian units, the construction of our floats takes many months and typically requires thousands of volunteers to gather in ways that aren't in compliance with safety recommendations and won't be safe in the coming months," said David Eads, the executive director and CEO.
The association said it was working with broadcast partners and sponsors on an alternative celebration and promised details in the coming weeks.
The Jan. 1 Rose Bowl football game would be a college football playoff semifinal.
"While the safety and well-being of the student athletes, university personnel and fans is our top priority, we remain hopeful that the Granddaddy of Them All will take place on New Year's Day," Eads said.