The World Surf League, organiser of the Margaret River Pro, said two shark attacks
in nearby Gracetown and the further threat of aggressive behavior from the animals because of the presence of beached whales made circumstances "very unusual and troubling."
"The WSL puts the highest premium on safety," said chief executive Sophie Goldschmidt in a statement
on the body's website.
Goldschmidt added: "Surfing is a sport that carries various forms of risk, and is unique in that wild animals inhabit our performance environment. Sharks are an occasional reality of WSL competitions, and of surfing in general."
However, she said the "elevated risk" in Margaret River had "crossed the threshold for what is acceptable."
WSL commissioner Kieren Perrow added in a video on Instagram: "This decision was really difficult. We consulted with all of our stakeholders, including the surfers, and assessing all of the situations and local information available ... we felt that was the clearest and best decision to make."
In 2015, three-time world champion Mick Fanning was attacked by a shark during a contest at Jeffrey's Bay in South Africa.
Fanning said he punched the shark and used his board as a shield before jet skis could reach him and opponent Julian Wilson to drag then from the surf.
The Australian was also pulled out of the water by safety craft during last year's Jeffrey's Bay event when a shark was spotted in the water.
The quarter-final against Brazilian Gabriel Medina was put on hold until officials were satisfied the shark had left the area.
"There have been incidents in the past -- and it's possible that there will be incidents in the future -- which did not (and will not) result in the cancellation of an event. However, current circumstances are very unusual and troubling," said Goldschmidt.
"If we decided to continue the event under the current circumstances, and something terrible were to take place, we would never forgive ourselves."
In 2012, a great white shark attack took the life of surfer Ben Linden, while later that years 34-year-old surfer Jon Hines suffered serious injuries after being attacked at Red Bluff, north of the Gascoyne town of Carnarvon.