The Wangaratta council in the state's north decided to delay the Rainbow Ball after receiving information from Victoria Police.
Mayor Dean Rees said the council supported its LGBTQI community, but prioritising their safety was not negotiable.
"There has been some confronting commentary around the Rainbow Ball circulated on social media, and because of this, we have chosen to prioritise the safety of all attendees and staff and delay the event," Mr Rees said in a statement.
The ball is the latest of at least 10 queer events cancelled in Victoria in recent months, including drag storytimes and singalongs, after threats from far-right groups.
"There has been some hateful narrative around this event, we do not accept this but we cannot risk an event that is about fun and celebration posing a risk to anyone attending."
Police had been asked to provide information to the council ahead of the event.
The council is working with partner organisations and the area's residents to support people affected by the situation.
"We have a diverse and vibrant community and all members of our community have the right to feel safe and be themselves heres," Mr Rees said.
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