The Welsh Music Prize, won last year by Welsh-language singer Gwenno and her album Y Dydd Olaf, was to include performances from nominated artists.
Cate Le Bon and Climbing Trees are two of the 12 acts nominated for the award.
Organisers will now have an invite-only awards ceremony without live music at The Depot in Cardiff on 24 November.
"We are taking the step to reduce our noise output by reverting to an invite-only event without live performances," said a Welsh Music Prize statement.
"Due to a small number of noise complaints in recent months at The Depot, we do not want to proceed with a full programme of amplified live music as originally intended.
"We have big plans for next year and we are sorry for any disappointment this may cause."
The Welsh Music Prize, whose past nominees include Manic Street Preachers, Catfish and The Bottlemen and Super Furry Animals frontman Gruff Rhys, has promised refunds for purchased tickets.
The Depot owner Nick Saunders confirmed the awards have been scaled back as the venue "works with Cardiff council and local residents" to minimise any potential disruption.
"We will do everything we can to ensure the local residents enjoy the Depot as much as we do," he added.
A Welsh music award ceremony founded by BBC Radio 1 DJ Huw Stephens has been scaled back at the last minute because of noise complaints at the host venue.