The race at the Hungaroring is scheduled for August 2.
The Hungarian Grand Prix must be held behind closed doors if it takes place at all this summer due to a ban on mass gatherings in the country being imposed until mid-August.
The Hungarian government has said that no event in front of more than 500 people can take place before August 15, with the Grand Prix at the Hungaroring scheduled for August 2.
A statement from the Hungaroring read: "The health and well-being of all our fantastic Formula 1 fans, staff and championship participants has been and remains our primary concern throughout this period and with that in mind we have regrettably been left with no choice but to reach this conclusion.
"We have continuously emphasised our willingness to work towards a safe solution that would allow us to welcome the entire Formula 1 family to the Hungaroring this August but yesterday it became evident that any F1 race in Hungary can now only be held behind closed doors."
The announcement comes in the same week that Silverstone announced that the British Grand Prix would be behind closed doors if it is able to go ahead as scheduled on July 19.
So far 10 Grands Prix have either been postponed or cancelled due to the pandemic.
The season was due to begin in Melbourne in March, but the opening Australian Grand Prix was cancelled at the 11th hour after McLaren withdrew from the race due to a positive coronavirus test for one of their staff members.
F1 bosses are working on a revised schedule for the season, and earlier this week F1 chief executive Chase Carey said it was hoped racing could resume in July with the Austrian Grand Prix, which is currently set to take place on July 5 in Spielberg.
Carey said the goal was to complete between 15 and 18 races in a compacted season.