WESTS Entertainment Group made the "devastating" decision on Tuesday morning to cancel all live concerts set down at the two Tamworth venues in January.
The Leader understands the Longyard Hotel has also informed scheduled artists they won't be able to take the stage at the venue next week.
Wests CEO Rod Laing said the call came down to the COVID-19 restrictions currently in place.
"The health orders that concern me the most are about no singing and dancing and in the best interests of our members, guests and staff ... we cancelled the entertainment," he told the Leader.
"We were closed down at the end of March and April, May last year and I don't want to see us shut down again, that's the main driver."
Mr Laing said he had to consider SafeWork NSW, Liquor and Gaming NSW and licensing police would be patrolling during what would have been the 2021 version of the Tamworth Country Music Festival.
"It's extremely difficult for ourselves, our staff and the entertainers to comply," he said.
He said he hoped not having live music would help keep patrons "local" instead of drawing visitors from potential hotspots.
"My job is to do whatever it takes to keep everyone safe," Mr Laing said.
"The effect on staff, entertainers and fans will no doubt be devastating but we're all in this together and it's a pandemic."
The announcement from Wests affects events planned for Wests Leagues Club and Diggers, in Kable Avenue.
It is understood some venues in Tamworth - including the other Pub Group locations - are still planning on hosting COVID-safe shows this month.
The Tamworth Country Music Festival 2021 was officially cancelled by Tamworth Regional Council last year amid COVID-19, but a small venue-led festival is expected to take place during the next two weeks.