The event at Brunswick Park also saw three people injured when a stray rocket shot into the crowd.
Although the accident was due to a faulty firework, Sandwell Council says the park cannot cope with such high numbers of visitors.
They are replacing the display with a bonfire at Tipton's Jubilee Park, which is bigger, on November 6.
The start of last year's event at Brunswick Park, which has been running for three years, had to be delayed due to the bumper crowds.
Deputy council leader Steve Eling said the decision not to hold the event in Wednesbury this year had been made due to safety concerns.
"Brunswick Park is not big enough for the number of people who attended last year," he said. "We had problems with people getting into the park and the park couldn't cope with that number of people. We have moved the event to Jubilee Park which is a bigger venue."
Wednesbury North councillor Elaine Costigan said she was disappointed by the decision not to run the event in Wednesbury.
"It's a shame because the event hadn't had any problems before last year," she said.
"What happened with the firework couldn't have been prevented - it was a dud firework.
"I'm extremely disappointed that there will be no firework display in Wednesbury - it's very disappointing for people in Wednesbury as it was a popular event. It's a shame they couldn't have found a way to hold it at Brunswick Park again," she added.
Speaking after last year's event, Councillor Costigan claimed safety had been a priority for organisers.
Numerous calls were made on the public address system for people to move away from the fireworks before the display started. The event was delayed for 20 minutes as the crowd was forced back.
Among those who were injured last year was father-of-five Jason Deeley-Brewer, who was burned when the rocket hit and exploded on his leg.
A seven-year-old girl and 23-year-old man were also treated by paramedics.
The last time a firework display was held in Jubilee Park was in 2007.