The annual "World Raki Festival" had been scheduled to take place on December 12 and 13 in Adana, a Mediterranean city famous for its Turkish kebab.
But the provincial governor cancelled the event at the last-minute following protests from Islamic associations which denounced it as a "disgrace."
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"It's not possible for us to allow something like this," Mustafa Buyuk was quoted as saying by the Hurriyet newspaper on Thursday.
"We don't want people to drink alcohol and we can not tolerate its promotion."
The street festival has been a key tourist event in Adana for several years, attracting around 20,000 fans of raki, a strong aniseed-flavoured liquor.
In a joint statement last week, several groups including the local branches of Turkey's top religious body Diyanet, demanded that the festival be cancelled, saying it was a "disgrace" and "a way of seducing people to drink alcohol".
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However the city's mayor Huseyin Sozlu, a member of the Nationalist Movement Party (MHP), denounced the decision as an "attack on individual freedoms" in the traditionally secular Muslim country.
More than 4,600 people have signed an online petition calling on the government to drop the ban, while another one demanding the festival be cancelled has attracted around 800 supporters on global petition website Change.org.
"If you prevent people from partying, it means you are directly interfering in their private life," protested prominent commentator Deniz Zeyrek on CNN-Turk television.
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Opponents of President Recep Tayyip Erdogan have long voiced fears of the Islamisation of society under his rule which has seen a greater emphasis placed on religion in Turkish life.
In 2013, parliament passed legislation curbing alcohol sales and advertising, as well as increasing taxes on beer, wine and spirits -- the toughest such measures in the republic's nine-decade history.
Erdogan, a devout Muslim who does not drink or smoke, defended the law and has urged people to drink ayran, a non-alcoholic beverage made from yoghurt, instead of raki.
The festival ban came after the deaths of 28 people over the past few weeks after drinking bootleg versions of raki, in what appears to be the country's worst ever bout of alcohol poisoning.
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