The attraction was one of the focal points for the event.
However, the Department for Enterprise says it decided to ditch the idea this year ‘to create more space in central Douglas for residents and visitors, enabling more potential custom for local businesses’.
The Red Arrows will perform over Douglas Bay on June 7 and there will be a fireworks display on Senior Race Day.
Enterprise Minister Alex Allinson MHK said: ‘This news may be disappointing for some, however the decision not to run the funfair this year has been made with local people and the economy in mind.
‘Our community, businesses and hospitality sector have been deeply affected by the pandemic, so it’s important that we take this opportunity to support all the local events and activities during the island’s biggest event of the year.’