The event had been scheduled to begin Thursday (Nov 14) and had already been scaled back as Australia struggles to control the blazes that have killed three people.
"Considering the best interests and safety of everyone involved in the rally, and of course the wider community, it is not appropriate to conduct the rally," event chairman Andrew Papadopoulos said in a statement.
"Our thoughts are with the NSW community, especially the people who have lost loved ones, livelihoods and homes."
Estonia's Ott Tanak wrapped up his first World Rally title when he finished second to Thierry Neuville in the rally of Catalonia just over two weeks ago.
Tanak, who drives for Toyota but will switch to Hyundai next season, now finishes the season 36 points ahead of Belgian Thierry Neuville.
Tanak is the first non-Frenchman to win the title since Norwegian Petter Solberg in 2003. Sebastien Loeb won it nine years straight with Sebastien Ogier winning the last six.
Hyundai will win the manufacturers crown by virtue of being 18 points ahead of Toyota going into the now-cancelled Australian race.