The China Advertising Association has written to inform organisers that the 90-strong delegation will not be attending the festival, due to start on June 15.
Shi Xuezhi, secretary general of the China Advertising Association, said: "In order to effectively prevent SARS from spreading to other countries, the Chinese government has stipulated that all official activities to go abroad are paused."
The news comes as the industry prepares for what could be a subdued time at its annual knees-up, with agencies either forced to cut costs or deeming it inappropriate to undertake lavish corporate hospitality in the face of an advertising downturn.
There have also been also fears that some US agency staff would boycott the festival in protest at France's stance on the invasion of Iraq.
Roger Hatchuel, chairman of the festival, said: "This spontaneous action by the Chinese delegation is to be commended, which combined with the French health authorities' initiatives, should serve as a reassurance to delegates attending the festival."
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