Jamie Murray - who organised the event - was set to play alongside younger brother Andy in the doublesThe Battle of the Brits - an exhibition organised by Jamie Murray and featuring Andy Murray - has been postponed because of rising coronavirus cases.
The men's team event between Scotland and England was set to take place in Aberdeen on 21 and 22 December.
British number one Cameron Norrie was set to play alongside the Murrays for the hosts, with Dan Evans leading the English side.
"We are all gutted but some things are bigger than tennis," said Jamie Murray.
"This is incredibly disappointing for all of us organising the event, for the players and, most importantly, for the fans who wanted to come and watch us. All that matters is keeping everyone safe."
The event will be rescheduled in 2022.
Meanwhile, former British number two James Ward has announced his retirement from professional tennis.
Ward, 34, was part of the nation's squad which won the 2015 Davis Cup, memorably beating top-20 player John Isner in Britain's opening tie against the United States.
The Londoner reached 89th in the singles world rankings following a run to the Wimbledon third round in 2015, then played top seed Novak Djokovic at the All England Club a year later.
"From camping outside Wimbledon for a ticket at the age of 10, to go on and play the world number one on Centre Court, breaking into the ATP Top 100 and winning the Davis Cup representing Great Britain - I can live with that," said Ward, who has struggled with knee injuries in recent years.
"Now it's time to enjoy life in a different way and I look forward to what's next."
