"While this was not an easy decision as the fireworks have always been a popular part of our New Year's Eve event, we are acutely aware of the bushfire situation that has gripped our region", said Campbelltown City Council's General Manager, Lindy Deitz.
Parramatta Council in Sydney has cancelled New Year's Eve fireworks and festivities, citing "extreme weather conditions" expected on New Year's Eve.
As of Monday, authorities plan to push ahead with the display but an online petition is calling for the event to be canceled and the money be given to farmers and firefighters.
Government members have also chimed on the ban, with Deputy Premier of New South Wales John Barilaro saying on Twitter the fireworks should be axed because of the risks.
Ms Moore told a press conference that New Year's Eve was an important celebration that would "give hope to people at a bad time".
"To leverage the event to drive donations towards the Red Cross's disaster relief and recovery fund will have a meaningful impact on those communities". "If it is safe to do so, we should continue to do it as we have done every other year".
"Many people have already flown in and paid for hotels and restaurants, travelling from all over the world to be here for tonight's New Year's Eve".
"In the midst of the challenges that we face, subject to the safety considerations, I can think of no better time to express to the world just how optimistic and positive we are as a country", Morrison said.
It's thought that more than a million people watched the spectacle from the banks around Sydney harbour.
However, NSW Rural Fire Service Commissioner Shane Fitzsimmons wouldn't be opposed to shutting down the fireworks at the last minute if it becomes "too risky".
With New Year's Eve kicking off on Tuesday, the Bureau of Meteorology said there would be extreme and severe fire danger ratings across NSW.