Pro-Kannada outfit Karnataka Rakshana Vedike and some other organizations have been opposing the proposed event on December 31 alleging that the invitation to Sunny Leone will be an "assault" on the city's culture.
For the past one week, the KRV members have been agitating in the city, taking out rallies and burning effigies of Sunny Leone.
"I have instructed (authorities) not to allow such events. Don't bring her (Leone) here. People are opposed to the event. Let them (organisers) organise events related to Kannada culture and literature, which is our heritage," Karnataka Home Minister Ramalinga Reddy told PTI.
KRV office-bearer Harish welcomed the government decision.
"It is a victory for us. Government has cancelled the programme. Had it happened here, we would have brought activists from 20 districts to Bengaluru and held a mega protest here.
This is not for the first time the actress has faced protests in the country.
Couple of days ago, the government sent an advisory to TV channels to not air condom advertisements between 6 am-10 pm. Sunny, a prominent face of a condom brand featured in those raunchy ads.
According to the search engine's 2017 Year in Search results, the actress again featured among the top entertainers this year.