Northern Ireland Secretary Sir Chris Bryant has said he will ban the Drumcree parade.
The dispute has led to a stand-off between Orangemen and nationalist residents of the Garvaghy Road in Portadown lasting almost two weeks.
Sir Chris said the Police Service of Northern Ireland (PSNI) chief constable advised him “that it would not be possible to enable the procession to happen without a major intervention which would carry an unacceptable risk of serious injury, disorder and a wider contagion effect across Northern Ireland”.
Sir Chris had been coming under increasing pressure from Sinn Féin and the SDLP to stop the parade. The move comes on the 13th day of deadlock between residents and the local district lodge of the Orange Order.
The Parades Commission ruled that the march could go ahead with restrictions in place.
But the parade, from Drumcree Church into Portadown, did not happen due to a large protest on the Garvaghy Road.
On Friday night, Sir Chris added: “The Parades Commission have also advised me that while ultimately a matter for the courts to determine, the commission is of the view that, in light of this current assessment by the chief constable, the original determination does not now have enduring legal effect.
“Consequently, and in the interests of wider public interest and safety, I’ve come to the conclusion that the circumstances under which that decision was made have now changed considerably,” he said.
“As a result, the procession cannot go ahead as it was determined.”
Under legislation, a secretary of state can overturn a Parades Commission determination, especially following some form of input from the PSNI.
