Pyramid Rock Festival, a two-day-and-night annual music festival hosted at Phillip Island over the new year, has been cancelled this year.

On Wednesday organisers Inversion Productions published on the festival website a statement saying the event would not go ahead.

The Pyramid Rock Festival began in 2004.

"Due to tough economic conditions in recent years the festival has become unviable for Inversion Productions and their only option is to cancel the event," the statement said.

But the event has not been canned completely and options will be explored for a return "on a permanent basis in 2014".