Melbourne's major Australia Day fireworks display has been scrapped by the state government as firefighters continue grappling with this summer’s devastating bushfires.

The government has decided to cancel the Docklands fireworks given Parks Victoria staff who are usually involved in the event have been fighting bushfires in East Gippsland and the state's north-east.

A family watches the New Year's Eve fireworks in Melbourne. Credit:Chris Hopkins

"Given the huge resources Parks Victoria has invested in fighting fires and protecting our parks and people over recent weeks, the Victorian government has decided to cancel this year's fireworks at Docklands," a spokeswoman said.

"While we understand that this decision may disappoint some families, the focus right now of Parks Victoria is, and has to be, on working with our other emergency services in the firefighting effort and the recovery of communities and wildlife."