Yvan Mayeur, the mayor of Brussels, said the decision was taken after talks with government officials.
“We are forced to cancel in view of the risk analysis done by the Crisis Centre,” he told RTBF television.
Mr Mayeur said 100,000 people had attended last year’s celebrations and it would be impossible for police to check everyone if a similar number turned out this year.
“In these circumstances, we can’t check everyone,” he said.
The announcement followed the arrests of two men earlier this week suspected of involvement in a plot to target Brussels landmarks, police headquarters and other sites during the holidays. Another person was detained for questioning on Wednesday as police searched an address in the Molenbeek suburb of the city.
Four of the Paris attackers who slaughtered 130 people in the French capital last month had lived in Brussels. The city went into lockdown for two days in the aftermath of the Paris attacks to foil what the authorities said was a planned attack in the Belgian capital.