The director of the Angus Castle, David Broadfoot, said the double whammy of a tough year and the current economic uncertainty had led to the cancellation.
The prom had been scheduled for August 10. Music fans who have already purchased tickets will be entitled to full refunds.
Mr Broadfoot said: "If the event becomes viable again we would consider reinstating it because we know it was much enjoyed by those who have attended in previous years."
Angus Council's tourism spokeswoman, Mairi Evans, expressed disappointment and said it was one of the major tourism events on the Scottish calendar.