"At 9 am today the Australian Grand Prix Corporation (AGPC) was advised by Formula 1 of their intention to cancel all Formula 1 activity at the Formula 1 Australian Grand Prix," the AGPC said in a statement.
"In light of this decision and updated advice this morning from the Chief Health Officer of the Victorian Government’s Department of Human and Health Services, the Australian Grand Prix Corporation confirms the Formula 1 Australian Grand Prix is canceled immediately."
There were big question marks over the season-opening race after McLaren withdrew late on Thursday night when a member of their team tested positive for the virus.
The fourth round of the championship in Shanghai in April has already been postponed, while organizers of the Bahrain Grand Prix said last weekend that their race would go ahead without spectators on March 22.
Confusion reigned earlier on Friday, with fans flocking to the lakeside race-track and local broadcaster Channel Nine reporting that the AGPC chairman had said they would plow on with the race.
Hundreds of fans milled around closed entry gates before Victoria state Premier Daniel Andrews announced that none would be permitted to enter even if the race went ahead.
There was clearly pressure from Formula One teams, with Mercedes saying they had requested organizers call it off and that they had started to pack up and leave the circuit.Mercedes world champion Lewis Hamilton on Thursday also weighed in, saying it was "shocking" that organizers wanted to push on even with the NBA and other major sports suspending matches and competitions.