The Wuhan city government in Hubei province had scheduled the show for Tuesday night.
Wuhan has been wrapped in smog for days and the bad air in December has prompted a fireworks ban in downtown areas, Xinhua reported.
Most residents support the move as the display is costly and can cause further pollution. Among urban residents, pollution has become a main source of complaints and health concern.
Firework celebrations have been allowed for the past 19 years.
Earlier, authorities in Beijing said firework celebrations will be cancelled if serious air pollution is forecast for the New Year.
The firework celebrations last year led to a surge in the PM 2.5 reading to 500 micrograms per cubic metre on the New Year's eve in Beijing.
People in China have a tradition of heralding the New Year with firecrackers and fireworks, hoping the noise will fend off evil spirits and bad luck.
--IANS (Posted on 30-12-2013)