Offensive material found on a website promoting a martial arts event at St George's Market in Belfast prompted the decision to cancel it, Belfast City Council has said.
The council said the material was discovered after councillors raised concerns about the Last Man Standing event, due to be held at the indoor market on September 30.
Eight international fighters had been due to compete in the mixed martial arts event, with the winner awarded a £10,000 prize and the Last Man Standing title.
However, the organisers said they had met all Belfast City Council's requirements from the outset and had not been given a chance to rectify any problems raised at the weekend before the decision to cancel the event was made.
A council spokeswoman said: "Following on from concerns raised by councillors an investigation was carried out by council officers and offensive material was discovered on the website promoting the event.
"For that reason the council has decided to cancel this event which was due to be held at St George's Market."
Event manager Donal Kelly told the Belfast Telegraph the material referred to was an advertisement for Pitbull Clothing and a song by hip hop artist DMX which used the N-word.
"DMX is a well-known multi-million selling artist. If anybody listens to hip hop and r'n'b, it's a line in the song," he said.
"Instantly, without any chance to talk to us, the Director of Development pulled the venue out from under us."
The tournament involved a number of international title holders from Spain, Russia, Brazil and the UK, including World Kickboxing Champion WFA, Serjei Maslobojev.
Among the competitors was Belfast ju jitsu fighter Tim McCrory who has been in training for months, Mr Kelly said.
"This was hopefully his first chance to take part in an international tournament and he is devastated at having that opportunity taken away," Mr Kelly said.
"This was his opportunity to make his name on the international circuit and it was taken away at the 11th hour.
"This was the first event of its type ever to be held in Ireland. Our event was to be held in a ring and it's an international sports event that is not all about the razzmatazz and putting it in a cage."
Event organiser Roberto Gallo said he was shocked and disappointed at the " overreaction of certain Belfast City Council members" towards an international sporting event.
"I believe that a major mistake has been made and it is our intention to appeal this hasty decision."