Deco Publique, Lancaster City Council and the team at Hemingway Design have made the decision to cancel the festival after lengthy conversations with all partners.
However, a pop-up programme of entertainment by Deco Publique will take place over the summer for locals and visitors alike.
The statement made by Deco Publique reads as follows: "After lengthy conversations with all partners, Deco Publique, Lancaster City Council and the team at Hemingway Design, a decision has been made that this year's Vintage by the Sea festival will not take place due to the ongoing uncertainty and risk posed by Covid-19.
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"Our festival weekend welcomes more than 40,000 people to Morecambe, taking over the town and promenade with music, markets, street food, art, performance, and above all, a joyous family-friendly festival for all to enjoy.
"We have waited for as long as possible before making this decision but we have come to a point where, based on current regulations on mass gatherings, no current clarifications of control measures going forward, and no availability of insurance to underwrite the costs, it has become simply impossible to plan.
"Everyone involved in the event desperately wants a return to a place where mass gatherings, dancing and celebrating are the norm, however we need more assurance and clarity to be confident restrictions will be lifted for us to be able to provide an event which does all of those things.
"We each value the need for culture and creativity in our everyday lives. As an alternative to the festival weekend, the partners will look to support culture company Deco Publique, curators of Vintage by the Sea, to present a pop-up programme throughout the summer that responds to the guidelines as they stand and supports Morecambe's local communities and visitor economy alike.
"Thank you to everyone who has been on the Vintage by the Sea journey with us so far and we look forward to planning the best possible festival in 2022."