The festival is widely recognised as the world's largest classic event, and more than 100,000 people were expected to attend this year's event which was scheduled to take place between July 31 and August 2.
This year would have seen the Silverstone Classic celebrate its 30th anniversary.
Initially, organisers considered postponing the event to a later date, but they have now taken the step to call it off, and will now start planning for the 2021 event next summer.
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A statement from the organisers read: "It is with a heavy heart that the organisers of the Silverstone Classic announce that this summer’s flagship three-day festival – originally scheduled for the weekend of 31 July to the 2 August – has sadly been cancelled.
"As the world’s biggest classic motor racing festival, the massive event always attracts unrivalled grids, many thousands of classic car owners and more than 100,000 visitors, many of whom camp out at Silverstone.
"The nature and scale of the event make running it in a safe, socially-distanced manner a huge challenge in the current situation; and the event’s much-loved family festival ethos also means that running the event behind closed doors isn’t a feasible option.
"This summer, the pioneering Classic had massive plans to celebrate its milestone 30th birthday with a special ‘greatest hits’ racecard but organisers have indicated that they will carry forward these celebrations to the 2021 event."
Nick Wigley, the CEO of Classic organiser Goose Live Events, said: "Following the latest Government advice we have reached the inevitable conclusion that we will need to cancel this year’s event.
“Given the current circumstances and the unclear outlook on timescales, staging a postponed event – which was our original back-up plan – isn’t something we can plan for with any degree of certainty if we are to deliver the style of Classic that we all know and love.
“I can’t tell you how sad this news makes me feel.
"For the past 12 years it has been my life’s focus to build the Classic into the most amazing family friendly classic racing festival, the biggest – and many people think the best – in the world, but our priority at all times is the safety and wellbeing of those attending our events – as well as our own team – and we know that Classic fans will understand why this step has been necessary.
“As an independent events company passionate about what we do, we are so proud to have developed the Silverstone Classic into an internationally renowned historic motorsport festival enjoyed across generations of car enthusiasts, families, racing drivers and petrolheads.
“In times of difficulty, communities tend to come together and we’re incredibly grateful for everyone’s continued support. It means a lot.
"The passion of those coming through our gates is what makes the event the success that it has become and we are now already looking forward to celebrating our delayed 30th anniversary with everyone next year instead.”
The record numbers of people who have already purchased Super Early Bird and Early Bird tickets will be offered the option either of rolling over their tickets to the 2021 event or requesting a full refund.
All ticket holders will be contacted in June with details of the next steps. As ever all the latest information can be found at www.silverstoneclassic.com