Roundhouse Entertainment announced the decision Tuesday morning, attributing it to unsafe environmental conditions and hazardous air quality.

All ticket purchasers will be contacted by Ticketmaster and a full refund will be provided, with these to be processed over the next week.

The concert at All Saints Estate also featured Birds of Tokyo and Magic Dirt.

At this stage Friday's sold-out show at Rochford Wines, Yarra Valley and Saturday's sold-out show at Mt Duneed Estate, Geelong will go ahead as planned.

Orange's show on February 1 at Heifer Station won't be impacted.

Promoter Michael Newton said organisers were extremely disappointed to cancel Tuesday's event but the unsafe conditions gave us no other option.

"Our first priority is the safety of patrons, staff and artists and with air quality on the site and in surrounding areas now at a hazardous level, we have no other option but to cancel today's show," he said Tuesday morning.

"We have been on-site for the past week preparing for the show, and sadly we have seen the air quality deteriorate to a level where we have been advised that it would not be safe to proceed.

"We are also concerned about traffic, given the fires in the area.

"This is a really unfortunate situation.

"We do not cancel shows lightly, and we are devastated that we have had to cancel what would have been our first show for 2020."