Organizers said it will be replaced by a smaller event called the Santa Farewell Festival, the Orlando (Fla.) Sentinel reported.
"With better economic times ahead, the parade will hopefully return in 2011," parade producer Teri Boardman said. "Thank you to all past participants and parade supporters."
Boardman said dwindling sponsorship forced her to cancel the 2010 edition of the parade, which is not funded by the city.
"It all comes down to sponsors equal money to pay city [fees]," Boardman said.
She said running the parade means paying for barricades, police for security and street sweepers to clean up afterward, among other costs.
Boardman said area businesses were reluctant or unwilling to get involved for various reasons.
"Most cities have a budget to do a Christmas parade," Boardman said.
The parade's cancellation won't spoil holiday cheer, Boardman said.
The Santa Farewell Festival will be held Dec. 18. It is billed as a special sendoff for Santa before he returns to the North Pole to pack his sleigh.
Copyright 2010 United Press International, Inc. (UPI).