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The Otago Rally is forging ahead but no international competitors will line up.
Organisers said the spread of the Covid-19 virus has had a considerable effect on the Otago Rally on April 3-5.
"It is with real sadness that we realise the large contingent of international competitors, media and fans will no longer be able to attend," a statement said.
"These enthusiasts have always been hugely valued and appreciated, and we have already been in contact with those affected competitors.
"They are now dealing with unwinding the considerable logistics involved in competing at Otago, and while this situation is out of our hands, it is not something we would wish on anyone."
The event had attracted former WRC driver Mikko Hirvonen, of Finland, while popular Scottish driver Alister McRae was also set to compete.
But the intention is for the rally to continue and planning will proceed.
There are 96 teams from New Zealand entered, a fantastic number by any standards. The Asia-Pacific Cup component can also proceed as the field is composed solely of New Zealand.
"We recognise that the decision to continue is still subject to further restrictions that might be announced this week by the prime minister, or other authorities, and we will need to fully comply with these."
"The essence of rallying competition is that it is not in a confined public space, but very dispersed in rural areas.
" If further public health directives are issued, these may well be focused on density of public gatherings, and in this regard there are options to manage this, without requiring event cancellation."
Later decisions could be made on whether parts of the rally, such as the superstage and the prize giving dinner, go ahead.
"Individual competitors or spectators may choose, or need to, change plans and not attend, and we fully respect such decisions."