Canberra's New Year's Eve fireworks displays have been cancelled with a total fire ban declared for the ACT until Wednesday morning.

Key points: Thousands of people were expected to attend the fireworks displays at Civic Square

Thousands of people were expected to attend the fireworks displays at Civic Square A total fire ban is in place in the ACT until 6:00am on Wednesday

A total fire ban is in place in the ACT until 6:00am on Wednesday Authorities are yet to decide whether other New Year's Eve festivities will be cancelled

The Bureau of Meteorology is forecasting hot, dry and windy conditions over the next few days, with temperatures expected to top 39 degrees.

Fireworks displays had been planned for 9:00pm and midnight as part of the New Year's Eve in the City celebrations in Civic Square.

Events ACT decided to cancel the events after receiving advice from the ACT Emergency Services Agency commissioner, Georgeina Whelan.

"It is a sensible decision for us not to proceed with the fireworks in the ACT," Commissioner Whelan said.

At this stage, Sydney's famous New Year's Eve fireworks will go ahead as planned but the NSW Rural Fire Service has refused to rule out cancelling the event at the last minute.

Given the severe fire conditions and poor air quality in Canberra, Commissioner Whelan said she would have been unlikely to provide a waiver for the fireworks to proceed.

"We have thousands of ACT residents who actually go to the vantage points around Canberra, such as Mt Ainslie, Black Mountain, Mt Pleasant and Red Hill," she said.

"With those vantage points only having very limited access and obviously evacuation points, and the curing of the grass in those areas, what I was most concerned was the fire risk that would be associated with that."

Thousands of people had been expected to attend the New Year's Eve celebrations in the CBD.

But Jo Verden from Events ACT said other planned activities — including live music performances — may also be cancelled.

"Events ACT is continuing to monitor weather conditions and smoke haze to determine if the other planned activities and live music performances can proceed without the fireworks," she said in a statement.

"It's disappointing that we can't bring the fireworks to Canberra this year, but safety of the public remains a priority for providing a fun and safe event."

Fireworks business backs cancellation

Martin Brady, whose business Fireworks Australia has put on the display for several years, said he understood the necessity of calling off the event.

"We fully understand why fireworks shows are being cancelled," he said.

"As far as I can tell, it's been the right decision every time, as bad as it is for our industry, but [fires are] terrible for lots of industries.

"It's bone dry and it's very hot, so we fully get it."

He said his business would feel the impact of the cancellation, as it would take significant labour to dismantle the display safely.

"It's actually cheaper for us to shoot a show than to pack it away," he said.

"There is a cost in cancelling the show, quite a high cost actually."

The fire danger rating in the ACT is predicted to be severe over the coming days and a total fire ban will be in place until 6:00am Wednesday.