Earlier in the week, police arrested two people suspected of planning attacks during the festive season.
Belgium has been on high alert since the terror attacks of 13 November in Paris. Several of the perpetrators are thought to have been based in Belgium.
Brussels Mayor Yvan Mayeur told state broadcaster RTBF: "Together with the interior minister, we`ve decided to not have the celebrations on Thursday evening."
Last year 100,000 people turned out in Brussels to welcome in the New Year, Mr Mayeur said.
"In these circumstances, we can`t check everyone," he said.
Last month, Brussels was placed under a four-day lockdown closing universities, schools and the metro system, amid fears of a Paris-style attack.
The shootings and bombings in the French capital left 130 people dead and hundreds wounded.
Belgium and Brussels have been central to investigations into the Paris attacks, which are thought to have been masterminded by a Belgian national, Abdelhamid Abaaoud. Other Belgian nationals or Brussels residents were involved.
More Belgians have gone to fight for the militant Islamic State (IS) group than any other European country, per capita.
`Symbolic targets`
The two men arrested in the Belgian raids this week were not linked to the Paris attacks, prosecutors said.
hey are accused of planning attacks against several "symbolic targets" in Brussels, as well as on the police, RTBF said.
They are due in court on Thursday for a decision on whether they should remain in custody, an unnamed official told Associated Press news agency.
The two are reported to belong to a motorbike club called the Kamikaze Riders.
Though the group is believed to be linked to Sharia4Belgium, a now disbanded radical Islamist group, a 2013 investigation found the club had no link to terrorism, Belgian TV news website De Redactie reported.
In the raids in Brussels and other towns police seized propaganda for the so-called Islamic State group, as well as military clothing and computer equipment.
Four other people were questioned in the raids and released without charge.
Without fanfare
Security has been stepped up in many cities across Europe ahead of New Year festivities.
On Wednesday Turkish police arrested two suspected IS members over and alleged plot to attack celebrations in Ankara.
They reportedly entered Turkey from Syria and were planning two separate attacks on crowded areas, the state-run Anadolu news agency reported.
Suicide vests and explosives were found during police raids.
A double suicide bombing killed more than 100 people in Ankara in October. Turkey has blamed IS, but no group has claimed the attack.
In Paris, a New Year fireworks display has been abandoned, but the traditional gathering on the Champs Elysees will take place, amid tight security.
"We have decided to mark the New Year in a reflective manner and without fanfare," Mayor Anne Hidalgo said.
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