"It takes thousands of man-hours, brings between 25 to 30,000 people into the city centre for the morning of the event and involves over 800 participants and volunteers.
"Our concern was that if we had continued with parade planning and then had to cancel several days out, if alert levels changed, there would have been a significant loss and waste of time and resources.
"Other cities are following a similar decision path with their parades, so we felt it [was] vital we make a decision in the best interests of our community. This way we can still provide a community event that will be significant for the city."
She said the new initiative could be staged at all alert levels and would be in the city centre for six weeks.
But Mainstreet Tauranga and Trustpower remained tight-lipped around the exact nature of the light installation.
"We wish to surprise and delight the community when they see it come to life. What we can say is that it features some dynamic light installations that have appeared at the Sydney Vivid Light festival in other major cities across New Zealand."
Trustpower community and communications advisor Ashleigh Cleaver said: "While it is sad the parade can't go ahead, it is exciting to have room to try something new this year."
Trustpower Toi Tauranga will launch the last week of November in the city centre.