The popular event, which attracts thousands of people from the coast and further afield, will not take place next year. It has been going for 19 years.
Last night (Thursday), the organising committee and several Muston residents attended the Muston Millennium Committee AGM in the village hall, and a decision was taken that this year's festival would be the last.
The committee's Facebook page states: "After the Chairman and Treasurer's reports were read, a discussion with regards to the festival's future was held.
"It became apparent that a large majority of the residents felt that for several reasons the festival was becoming more difficult to put on each year. Volunteer numbers had reduced in the last couple of years and there could be no guarantees as to how many people could commit sufficient time in the future.
"Our festival has been going for 19 years and the village is proud of the reputation it has gained as an enjoyable place to visit on the North Yorkshire Coast. Our residents were concerned that with less people being able to help out, standards may fall and our festival's reputation may suffer.
"Following the consultation with the residents, the committee came together and after discussion a decision on the future of the festival was made.
"It was decided that Muston Scarecrow Festival will end and this year's festival (2018) was the last one.
"We are sorry that our festival has come to an end but we believe it is the correct decision.
"We would like to thank everyone that has visited our festival over the last 19 years, you have been fantastic. We would especially like to thank all the residents and volunteers that have put on such a great show.
"We will be making sure that we notify everyone as quickly as we can - we are aware that many people plan their holidays on the coast around our festival. Thank You."