The Federal Government introduced an edict on Monday that all non-essential mass gatherings of more than 500 people should be avoided to limit the spread of COVID-19. It left organisers of the April 4 festival at The Station in Newcastle with little choice.

"Given the current circumstances, postponing Sound Station is the responsible and right thing to do," Newcastle Music Taskforce chair and Member for Newcastle, Tim Crakanthorp, said.

"Our local live music and hospitality industries will feel the impact of COVID-19, so it will be really important to get behind them later in the year when Sound Station goes ahead. Although Sound Station won't be happening until spring, I'm still looking forward to seeing our fantastic local musos and celebrating the talent we have in our city."

Sound Station is expected to be rescheduled in October.

The majority of acts have agreed to perform at the postponed festival, however it remains uncertain whether the headliner, Newcastle duo The Gooch Palms, will return after they announced last week they were disbanding in May following their upcoming national tour.

Sound Station was launched by the Newcastle Music Taskforce and the City of Newcastle in January to help stimulate support for the local music scene.

Given the uncertain financial future facing the entertainment industry due to coronavirus fears, Mr Crakanthorp said support was even more vital.

"Make no mistake, our industry is about to weather an unprecedented set of circumstances and we encourage the community to support live music in any way that is safe and responsible, including the purchase of music released by local artists," he said.

Newcastle's Cambridge Hotel has also been forced to modify its scheduled shows in line with government advice. All shows will be restricted to 500 people, despite the venue's main room boasting a capacity of 800.

"At the moment no shows are cancelled," Cambridge licensee Dru Russell said. "It's business as usual, we're just going to cap the shows at 500."

Byron Bay's Bluesfest announced on Monday it would not go ahead at Easter. That will likely lead to the cancellation of sideshows from international bands The Wailers and Eagles Of Death Metal at the Cambridge on April 15 and 16.

Stag & Hunter Hotel's Michael Starkey said no shows had been cancelled yet, but he was expecting gigs from international artists to be affected.