The 2012 X Factor winner James Arthur is to headline the festival at the town's Dock Park on 13 August.
Fans had to apply for the tickets for the event via the Youth Beatz website.
Dumfries and Galloway Council said all the tickets had now gone and they had been allocated to people from within the region.
Other acts involved in the 2016 edition of the festival include Cascada and Bella and the Bear.
Michael Williams, from the Oasis Events Team involved in organising the festival, said: "We can't believe how quickly the tickets have gone this year.
"We had an idea that it would be popular with the acts we had lined up, but we couldn't guess at this much demand.
"It's really good for us on the events team to see that an event like this that we're working on has so many people buzzing for it - we just can't wait for it to come round now!"
Dumfries Provost Ted Thompson said the event was a great opportunity for young people to "participate in and take pride in their community".
"I am delighted to announce the event has now sold out - and that this has been the quickest uptake ever," he said.
"The work put in by the team organising the event has been welcomed by the young people of Dumfries and Galloway and sets the stage for another fantastic day.
"Speaking on behalf of the Nithsdale Area Committee which has part funded Youth Beatz, making it the largest free event in Scotland and open to all young people in the region, we are pleased to see this investment has been received so warmly and I am really looking forward to the event."
All 12,000 tickets have been allocated for the Youth Beatz event in Dumfries, billed as Scotland's biggest free music festival.