Event general manager Vicki Lowry said the decision was one that had to be made.
"Second time around it doesn't make it any easier," she said.
"From now until the end of the year, things aren't looking great. With borders closed into New South Wales, and artists, emergency services and those attending the event all over the country, it simply wasn't possible to hold the Muster.
"We have a lot of people involved in the event, and we had to think about everyone involved when we made this decision."
Lowry said all the work done to organise the event was gone.
"There's been so much put into it," she said.
"Three months ago things were looking great, so so much work had gone into the event. It's incredibly draining on the staff, emotionally especially. It will take us some time to unwind from the announcement.
"But in speaking to everyone involved, the support is incredible. The response from people has been amazing, saying they will be back next year bigger than ever."