Ximo Puig, regional president of Valencia, announced the decision late on Tuesday night adding that other fiestas across the region would also be suspended “to protect the health of the Valencia community”.
He insisted the events could be held at a later date “once the health situation allows”.
The measure will come as a blow to the eastern city on the Mediterranean which attracts more than a million visitors to celebrate the spring festival that sees huge figures paraded through the street before being set on fire.
Estimates put the economic impact of the cancellation of Las Fallas at around half a billion euros.
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So far 63 people have been registered with the coronavirus in the Valencia region, the majority (42) in the city itself. while across Spain as a whole there have now been 1,648 recorded cases and 37 deaths.
Smaller festivities have also been cancelled in Valencia towns of Denia, Pego, Calpe and Pamis.
Meanwhile, Prime Minister Pedro Sánchez announced economic assistance for companies and families who are suffering financial hardship due to the ongoing novel coronavirus outbreak.
Cada persona puede ayudar a vencer la emergencia del #coronavirus siguiendo las recomendaciones de los expertos. Haciéndolo protegemos nuestra salud, la de nuestros familiares y conciudadanos. Habrá semanas difíciles, pero lo superaremos si todos y todas asumimos nuestro papel. pic.twitter.com/ePD1qT87HY
— Pedro Sánchez (@sanchezcastejon) March 10, 2020
In an announcement from Moncloa, the prime minister pledged to provide resources to parents who are unable to go to work and need to take care of their children, as well to offer financial aid to small and medium sized companies in sectors affected by the downturn.
He warned that there would be “difficult weeks” ahead in Spain.
“We will do whatever is necessary, wherever it is necessary and whenever it is necessary, and together we will overcome this crisis,” he said.
Chile placed Spain on a danger list on Tuesday night insisting all travellers arriving in Chile from Spain would be quarantined in the same way as those from Italy.
“People who enter Chilean territory having visited Spain and Italy, must remain in isolation for 14 days,” the health ministry said in a statement.
People arriving from these countries will be classified as “high risk travelers” and placed under the surveillance of Chilean health authorities during their isolation period, the ministry said.