The firework displays were due to go ahead on the Quayside in Newcastle and Riverside in Sunderland, with live music and entertainment.
The announcements follow a discussion between all LA7 councils, in which it was decided to cancel fireworks events in the region to ensure people stay safe despite such events being exempt from Covid passes.
Councillor Graeme Miller, leader of Sunderland City Council, said: “We’re really disappointed to have to cancel Sunderland’s New Year’s Eve activities, which were a new addition to the city events programme and something we know many families were looking forward to attending. In the end though, it is the right thing to do, as we face another surge in Covid cases owed to this new variant.
But the laser light show, due to take place on the 30th, 31st and 1st, will still go ahead in Newcastle as the Council expects crowds to be spread across the three events.
“It is with great sadness that we have to cancel the New Year’s Eve fireworks displays," said Cllr Nick Forbes, leader of Newcastle City Council.
"We understand the disappointment this will bring but it’s not a decision we have taken lightly.
“In light of the new Omicron variant and rise in Covid cases, we have a duty of care to minimise transmission and keep people safe.
The laser light show will see lasers positioned on the Tyne Bridge, Sage Gateshead, Baltic and Malmaison hotel on the Quayside plus Hadrian’s Tower and the Civic Centre.
The high-powered lasers will light up the night skies and will be visible to people within a ten-mile radius of the city centre.
The Council advises attendees to wear a mask and to stay at home if they have Covid-19 symptoms.