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The popular Santa parade, which was last year cancelled for the first time in 73 years due to Covid-19, has previously attracted crowds of up to 100,000 people.
The trustees of the Christmas parade have instead opted to open 'Santa's Mega Grotto' again for five days in December.
"The decision to forgo a Santa parade again was not an easy one but most practical for the trust," the parade's website says.
In place of the parade, Santa's Mega Grotto will be open at QE II park, off Travis Rd, on December 10, 11, 12, 18 and 19.
Financial support from the Christchurch City Council for the parade has fallen over the years.
"The trust is still recovering from financial issues that Covid-19 presented so was left with little choice," a spokesperson for the parade said.
In 2017, the city council provided $100,000 towards the parade. Funding dropped to $65,000 in 2018 and in 2019 it fell further to $25,000.
City council events and arts manager Tanya Cokojic told Stuff the council had a long history of supporting the parade and helped it find an alternative storage location in 2019.
Cokojic said the trust had not made an application for the parade this year, but had asked for $25,000 towards a Mega Grotto event instead.
In 2019, the trust moved its floats into the new storage facility at the old Christchurch School of Gymnastics building at QEII Park, saving $67,000 a year.
The trust received $5000 from the city council last year to help with the grotto at QE II. More than 12,500 people visited it last year.